<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Trico Marine Services, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
[Logo of Trico Marine Services Appears Here]
Trico Marine Services, Inc.
250 North American Court
Houma, Louisiana 70363
To Our Stockholders:
You are cordially invited to attend the 1999 Annual Meeting of Stockholders
of Trico Marine Services, Inc. on Tuesday, June 8, 1999, at 10:00 a.m. C.D.T.
at the Houston Racquet Club at 10709 Memorial Road, Houston, Texas.
The Notice of Annual Meeting and Proxy Statement accompanying this letter
describe in detail the formal business to be acted upon at the meeting,
including the election of two directors, a proposal relating to the issuance
of shares of the Company's Common Stock to certain investors and such other
business as may properly come before the meeting or any adjournment thereof.
After careful consideration, the Company's Board of Directors has
unanimously approved the proposal relating to the issuance of the Company's
Common Stock to certain investors set forth in the Proxy Statement and
recommends that you vote in favor of the proposal. The Board has also
nominated Thomas E. Fairley and Benjamin F. Bailar for reelection to the Board
and urges you to vote for their election.
Please sign, date and return the enclosed proxy card promptly. This will
save your company the additional expenses associated with soliciting proxies,
as well as ensure that your shares are represented. If you attend the meeting,
you may vote in person even if you have previously mailed a proxy card.
Sincerely,
/s/ Thomas E. Fairley
Thomas E. Fairley
President and Chief Executive
Officer
<PAGE>
[Logo of Trico Marine Services Appears Here]
Trico Marine Services, Inc.
250 North American Court
Houma, Louisiana 70363
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Stockholders of Trico Marine Services, Inc.:
The annual meeting of stockholders of Trico Marine Services, Inc. (the
"Company") will be held at the Houston Racquet Club, 10709 Memorial Road,
Houston, Texas, on June 8, 1999, at 10:00 a.m., local time, to consider and
take action on the following matters:
1. The election of two directors for a three-year term;
2. The approval of the issuance and sale of the second tranche of 4,000,000
shares of the Company's Common Stock pursuant to the terms of the
Purchase Agreement, dated as of April 16, 1999, among the Company and
Inverness/Phoenix Partners LP and Executive Capital Partners I LP; and
3. Such other business as may properly come before the meeting or any
adjournments thereof.
Only holders of record of the Company's Common Stock at the close of
business on April 28, 1999, are entitled to notice of and to vote at the
annual meeting.
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING
ENVELOPE AS PROMPTLY AS POSSIBLE. A PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE VOTING THEREOF.
By Order of the Board of Directors
/s/ Victor M. Perez
Victor M. Perez
Secretary
Houma, Louisiana
May 7, 1999
<PAGE>
Trico Marine Services, Inc.
250 North American Court
Houma, Louisiana 70363
May 7, 1999
----------------
PROXY STATEMENT
This Proxy Statement is furnished to stockholders of Trico Marine Services,
Inc. (the "Company") in connection with the solicitation on behalf of its
Board of Directors (the "Board") of proxies for use at the annual meeting of
stockholders of the Company to be held on June 8, 1999, at the time and place
set forth in the accompanying notice and at any adjournments thereof (the
"Meeting").
Only stockholders of record of the Company's common stock, $0.01 par value
per share ("Common Stock"), at the close of business on April 28, 1999, are
entitled to notice of and to vote at the Meeting. On that date, the Company
had outstanding 20,378,416 shares of Common Stock, each of which is entitled
to one vote.
The enclosed proxy may be revoked at any time prior to its exercise by
filing with the Secretary of the Company a written revocation or duly executed
proxy bearing a later date. The proxy will also be deemed revoked with respect
to any matter on which the stockholder votes in person at the Meeting.
Attendance at the Meeting will not in and of itself constitute a revocation of
a proxy. Unless otherwise marked, properly executed proxies in the form of the
accompanying proxy card will be voted for the election of the two nominees to
the Board listed below and for the approval of the proposals outlined herein.
This Proxy Statement is expected to be mailed to stockholders on or about
May 13, 1999. Proxies may be solicited by mail, personal interview, telephone
and telegraph. The Company has also retained the firm of D.F. King & Co., Inc.
to aid in the solicitation of brokers, banks and institutional and other
stockholders for a fee of approximately $5,000. Banks, brokerage houses and
other nominees or fiduciaries will be requested to forward the soliciting
material to their principals and to obtain authorization for the execution of
proxies. The cost of soliciting proxies hereunder will be borne by the
Company.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL ONE
ELECTION OF DIRECTORS
General
The Company's Certificate of Incorporation provides for a Board of Directors
to be made up of three classes, as nearly equal in number as possible. The
members of each class serve three-year staggered terms with one class to be
elected at each annual meeting. The terms of Messrs. Fairley and Bailar will
expire at the Meeting. Accordingly, proxies cannot be voted for more than two
nominees.
Unless authority to vote for the election of directors is withheld, the
proxies solicited hereby will be voted FOR the election of each individual
named under "Nominees" below. If either nominee should decline or be unable to
serve for any reason, votes will instead be cast for a substitute nominee
designated by the Board. The Board has no reason to believe that either
nominee will decline to be a candidate or, if elected, will be unable or
unwilling to serve. Under the Company's By-Laws, directors are elected by a
plurality vote.
The Board has nominated and urges you to vote FOR the reelection of Messrs.
Fairley and Bailar.
<PAGE>
The following table sets forth, as of May 8, 1999, certain information about
the nominees for re-election to the Board and the Company's other directors:
<TABLE>
<CAPTION>
Principal Occupation and Directorships Director Term
Nominees Age in Other Public Corporations Since Expiring
-------- --- ------------------------------------------- -------- --------
<S> <C> <C> <C> <C>
Thomas E. Fairley....... 51 President and Chief Executive Officer of 1993 2002
the Company; Director: Gulf Island
Fabrication, Inc. (fabricator of offshore
production platforms)
Benjamin F. Bailar...... 64 Dean Emeritus of the Jones Graduate School 1994 2002
of Administration at Rice University;
Director: U.S. Can Corporation, Dana
Corporation (manufacturer of auto parts)
and Smith International, Inc. (energy
services product and service provider)
<CAPTION>
Other Directors
---------------
<S> <C> <C> <C> <C>
Ronald O. Palmer........ 52 Chairman of the Board 1993 2000
Garth H. Greimann....... 44 Managing Director of Berkshire Partners LLC 1993 2000
(private equity investment firm); Director:
The Profit Recovery Group International
(provider of accounts payable and other
recovery auditing services)
W. McComb Dunwoody...... 54 Managing Director of Inverness Management 1999 2000
LLC (private equity investment firm).
Director: National-Oilwell, Inc. (energy
services equipment provider)
H. K. Acord............. 65 Oil and gas consultant. From 1993 to 1996, 1997 2001
Mr. Acord served as Executive Vice
President, Exploration and Production
Division of Mobil Oil Corporation
("Mobil"). From 1989 to 1993, he served as
a Vice President, International Producing
Operations for Mobil.
Edward C. Hutcheson,
Jr..................... 53 Principal with HWG Capital, a subsidiary of 1994 2001
Harris, Webb & Garrison (investment banking
firm). From November 1994 to October 1996,
Mr. Hutcheson served as CEO or Chairman of
the Board of Crown Castle International
Corp. ("Crown Castle") (owner and manager
of wireless communications towers). From
January 1994 to October 1994, Mr. Hutcheson
was involved in private investment
activities leading to the creation of Crown
Castle. From March 1992 to December 1993,
Mr. Hutcheson served as President and Chief
Operating Officer of Baroid Corporation (an
energy services and equipment provider);
Director: Titanium Metals Corporation
(titanium sponge and mill product
producer); Pinnacle Management & Trust Co.
and Crown Castle
James C. Comis, III..... 34 Managing Director of Inverness Management 1999 2001
LLC. Director: National-Oilwell, Inc. (an
energy services equipment provider)
</TABLE>
Vote Required for Election
Assuming the presence of a quorum, directors of the Company are elected by
plurality vote of the shares of Common Stock present in person or by proxy and
voting on the election of directors. Shares may be voted for or withheld from
each nominee for election as a director. Shares for which the vote is withheld
and "broker non-votes" will be excluded entirely and have no effect on the
election of directors of the Company.
2
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR EACH NOMINEE.
Board and Committee Meetings
During 1998, the Board held seven meetings. Each director of the Company
attended at least 75% of the aggregate number of meetings held during 1998 of
the Board and committees of which he was a member.
The Board has an Audit Committee and a Compensation Committee. The
Compensation Committee met two times in 1998. The Audit Committee met one time
in 1998. The Audit Committee, whose current members are Mr. Greimann and Dean
Bailar, reviews the Company's annual audit and meets with the Company's
independent public accountants to review the Company's internal controls and
financial management practices. The Compensation Committee, whose current
members are Messrs. Greimann and Hutcheson, is responsible for determining the
compensation of the Company's key employees and administering the Company's
stock incentive plans.
Compensation of Directors
Each non-employee director receives an annual fee of $12,500, plus $500 for
each Board or committee meeting attended. All directors are reimbursed for
reasonable out-of-pocket expenses incurred in attending Board and committee
meetings.
Under the Company's amended 1996 Incentive Compensation Plan, each non-
employee director receives an option to purchase 2,000 shares of Common Stock
on the day following each annual meeting of stockholders while such plan
remains in effect. Each non-employee director who joins the Board also
receives options to buy 10,000 shares of Common Stock. The options become
exercisable immediately and expire ten years from the date of grant. The
exercise price of the options is the closing sales price of the Company's
Common Stock on the date of grant on the Nasdaq National Market.
PROPOSAL TWO
APPROVAL OF THE ISSUANCE AND SALE OF SHARES OF COMMON STOCK
EXCEEDING 20% OF THE OUTSTANDING COMMON STOCK
General
On April 16, 1999, the Company entered into a Purchase Agreement (the
"Purchase Agreement") with affiliates of Inverness Management LLC, a privately
held investment firm, to purchase $50,000,000 of Common Stock in a private
placement. Under the Purchase Agreement, Inverness/Phoenix Partners LP and
Executive Capital Partners I LP (the "Investors"), agreed to purchase in two
tranches 8,000,000 shares of the Company's Common Stock at $6.25 per share. On
May 6, 1999, the Company closed the first tranche and issued 4,000,000 shares
of Common Stock for $25 million. Promptly following stockholder approval of
the issuance of the second tranche, the Company will issue and sell to the
Investors the remaining 4,000,000 shares of Common Stock for $25 million.
Background
The Company entered into the Purchase Agreement in order to improve the
Company's financial flexibility and enable the Company to pursue potential
acquisition and other investment opportunities in the current challenging
environment facing the marine support vessel industry. In January 1999, the
Company engaged Bear Stearns & Company, Inc. ("Bear Stearns") to explore
equity alternatives available to the Company. The Board and management
reviewed and considered several alternatives and, after careful consideration,
the Board of Directors determined that the sale of Common Stock pursuant to
the Purchase Agreement afforded the Company
3
<PAGE>
the most favorable terms of the proposals received. The Board unanimously
approved the Purchase Agreement and related matters and, in so doing,
considered a number of factors, including:
. the reduction in the Company's financial leverage and resulting enhanced
financial flexibility;
. the issuance of only Common Stock and the absence of any restrictive
covenants on the conduct of the Company's business;
. the premium to the Company's stock price offered by the Investors. On
April 15, 1999, the last full trading day prior to the date on which the
Purchase Agreement was signed, the purchase price represented a 20%
premium over the closing sale price of the Company's Common Stock. The
Board also considered the 25% premium offered by the Investors over the
previous 10 trading day average, the 27% premium over the previous 40
trading day average and the 27% premium over the previous 60 trading day
average price of the Company's Common Stock; and
. alternatives to the private offering, including alternative public or
private financing, which were either unavailable or were available on
terms the Board of Directors considered less favorable in light of all
the circumstances.
Nasdaq Requirements
Stockholder approval of the issuance of shares of Common Stock in the second
tranche is required by the governance rules of the Nasdaq Stock Market. The
Company's Common Stock is listed on the Nasdaq Stock Market, and Nasdaq's
corporate governance rules require stockholder approval for the private
placement of shares of Common Stock in an amount equal to 20% or more of the
shares outstanding before the private placement at a price less than the
greater of the Common Stock's market value or book value per share. Since the
number of shares of Common Stock to be issued under the Purchase Agreement
exceeds this amount and the purchase price for the Common Stock is less than
the Common Stock's book value, stockholder approval is required before the
Company can issue the shares of Common Stock in the second tranche.
The Transaction
The following is a summary of selected information relating to the issuance
of the Company's Common Stock to the Investors. A copy of the Purchase
Agreement and the Stockholders' Agreement between the Company and the
Investors are attached as Annex A and Annex B, respectively, of this Proxy
Statement. The summary is qualified in its entirety by reference to the terms
of the Purchase Agreement and Stockholders' Agreement.
The Purchase Agreement
The Purchase Agreement calls for the issuance and sale of 8,000,000 shares
of Common Stock to the Investors in two tranches of 4,000,000 shares each. The
Investors agreed to pay $6.25 per share of Common Stock, or an aggregate
consideration of $25 million at the closing of each tranche. The first tranche
closed on May 6, 1999, after the early termination of the waiting period under
the Hart-Scott-Rodino Act. The Company plans to close the second tranche
promptly following stockholder approval at the Meeting.
Under the Purchase Agreement, the Company agreed to pay a $2,000,000
transaction fee to the Investors. The Company paid $1,000,000 to the Investors
at the closing of the first tranche and has agreed to pay $1,000,000 to the
Investors upon the earlier to occur of the closing of the second tranche and
July 15, 1999. The Company must make the second payment of $1,000,000 whether
or not the second tranche of Common Stock is issued and sold to the Investors.
The Stockholders' Agreement
In accordance with the Purchase Agreement, the Company entered into a
Stockholders' Agreement with the Investors at the closing of the first
tranche. Under the terms of the Stockholders' Agreement, the Company
4
<PAGE>
increased the size of its Board of Directors from six to eight members. The
two new directorships were filled by the designees of the Investors, James C.
Comis, III and W. McComb Dunwoody. Under the Stockholders' Agreement, the
Investors have the right to designate two directors to the Company's Board of
Directors so long as the Investors own an aggregate of 4,000,000 shares of
Common Stock. If, however, either the second tranche does not close or the
Investors own less than 4,000,000 but more than 500,000 shares of Common
Stock, following the expiration of Mr. Comis' term of office as a director at
the Company's annual meeting in 2001, the Investors will have the right to
designate only one director to the Board of Directors. If the Investors do not
hold at least 500,000 shares, they will not have the right to designate any
directors to the Board of Directors. The Company agreed to take all necessary
action to assist in the nomination for election as directors the persons
designated by the Investors in accordance with the terms of the Stockholders'
Agreement.
Pursuant to the Stockholders' Agreement, the Investors agreed not to acquire
any additional shares of the Company's stock, other than the shares of Common
Stock purchased under the Purchase Agreement, without the prior consent of the
Board. The Investors also agreed to certain restrictions on the sale of their
shares of Common Stock, including limitations on the sale of Common Stock to
other companies engaged in the oilfield services industry. The Investors also
agreed not to, without the prior consent of the Board, solicit proxies or take
certain other actions relating to transactions that would result in a change
of control of the Company.
Under the Stockholders' Agreement, the Company granted the Investors'
certain registration rights with respect to the shares of Common Stock
acquired under the Purchase Agreement. Pursuant to the Stockholders'
Agreement, the Investors will be entitled to three demand registrations;
provided that the Investors register no less than 20% of the Common Stock they
owned pursuant to each such registration and the Company not be required to
effect more than one such registration in any 12-month period. The Investors
also have the right to require the Company to file a shelf registration with
respect to the shares acquired by them under the Purchase Agreement; provided
that the Investors register shares with an aggregate value of not less than $3
million and the Company will not be required to effect more than one such
shelf registration in any 12-month period. In addition, if the Company
proposes to register any Common Stock in connection with a public offering,
the Investors may require the Company to include all or a portion of the
shares owned by the Investors at that time. The Company has agreed to pay all
the expenses of any registration under the Stockholders' Agreement, other than
underwriters' discounts and commissions, and to indemnify the Investors for
certain liabilities in connection with any such registration.
Certain Considerations
While the Board of Directors is of the opinion that the issuance of the
Company's Common Stock in the second tranche under the Purchase Agreement is
advisable and in the best interests of the Company and its stockholders,
stockholders should consider the following possible factors, as well as the
other information contained in this Proxy Statement, in evaluating this
proposal.
Investors Are Significant Stockholders. Upon the completion of the first
tranche under the Purchase Agreement, the Investors held approximately 16% of
the Company's outstanding Common Stock, and became the Company's largest
stockholders. If the Company's stockholders approve the issuance of Common
Stock in the second tranche, the Investors will hold approximately 28% of the
Company's outstanding Common Stock. As significant stockholders, the Investors
may be able to significantly influence matters submitted to the stockholders
for a vote, including the election of directors and the approval of mergers
and other business combination transactions. The Investors have agreed under
the Stockholders' Agreement to certain restrictions on their actions relating
to proposals or transactions not approved by the Board that would result in a
change of control of the Company.
Possible Effect on Market Price. In connection with the Stockholders'
Agreement, the Company has granted the Investors certain demand and piggyback
registration rights in connection with the resale of the shares issued to the
Investors. These registration rights will facilitate the resale of the
Investors' shares into the public market and increase the number of shares of
Common Stock available for public trading. Resales of the shares issued to
5
<PAGE>
the Investors also could have the effect of creating downward pressure on the
market price of the Common Stock. The Investors cannot exercise their demand
registration rights under the Stockholders' Agreement until November 1999.
The Board of Directors considered these disadvantages and concluded that
they were outweighed by the advantages gained by the Company from the Purchase
Agreement. The Board considered the other equity alternatives available to the
Company and determined that the terms of the Purchase Agreement were the most
favorable available to the Company at this time.
Consequences If the Proposal Is Not Approved
The Company has determined that it needs the proceeds from the sale of the
second tranche to the Investors to further reduce the Company's financial
leverage and to enable the Company to accomplish its business plan relating to
potential acquisition and other investment opportunities. Stockholder approval
of this proposal is required under the rules of the Nasdaq Stock Market and is
a condition under the Purchase Agreement for the issuance of the shares of
Common Stock in the second tranche. If stockholder approval is not obtained
for this proposal, the second tranche will not be consummated. As a result,
the Company may be required to locate additional sources of equity financing.
There can be no assurance regarding the availability or terms of any such
additional equity financing, and the Company could be adversely affected if it
is unable to obtain such additional financing or if the terms of any such
additional financing are not as favorable to the Company as the terms of the
Purchase Agreement.
Vote Required for Approval
Assuming the presence of a quorum, an affirmative vote of a majority of the
shares of Common Stock present in person or by proxy and voting will be
required for the approval of issuance of the Company's Common Stock in the
second tranche under the Purchase Agreement. Abstentions with respect to
voting on this matter will have the effect of a negative vote, and "broker
non-votes" with respect to this matter will have no effect on the outcome of
the vote. Unless the proxy specifically indicates to the contrary, the Company
plans to vote all proxies solicited hereby in favor of this proposal.
Board of Directors' Recommendation
The Board of Directors and management of the Company reviewed and considered
several equity alternatives prior to entering into the Purchase Agreement with
the Investors. The Company's Board of Directors unanimously approved the
transaction, and believes that it is desirable and in the best interest of the
Company and the Company's stockholders to consummate the issuance and sale of
the Common Stock in the second tranche of the Purchase Agreement. Bear Stearns
served as the financial advisor to the Company in the transaction and also
rendered an opinion that the transaction is fair to the Company from a
financial point of view. A copy of the fairness opinion, setting forth the
information reviewed, assumptions made, and matters considered, is attached to
this Proxy Statement as Appendix C.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
APPROVAL OF THIS PROPOSAL.
----------------
6
<PAGE>
STOCK OWNERSHIP
The following table sets forth, as of May 8, 1999, certain information
regarding beneficial ownership of Common Stock of (i) each director and
nominee of the Company, (ii) each of the Named Executive Officers (as defined
below), (iii) all directors and executive officers of the Company as a group,
and (iv) the other stockholder known by the Company to be the beneficial owner
of more than 5% of the outstanding Common Stock, determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934. Unless otherwise
indicated, the securities are held with sole voting and investment power.
<TABLE>
<CAPTION>
No. of Percent
Name of Beneficial Owner Shares of Class
------------------------ --------- --------
<S> <C> <C>
Thomas E. Fairley................................ 496,826(/1/) 1.9%
Ronald O. Palmer................................. 476,826(/1/) 1.9%
W. McComb Dunwoody............................... 4,010,000(/1/)(/2/) 15.7%
James C. Comis................................... 4,010,000(/1/)(/2/) 15.7%
H. K. Acord...................................... 29,000(/1/) *
Benjamin F. Bailar............................... 38,000(/1/)(/3/) *
Garth H. Greimann................................ 25,256(/1/) *
Edward C. Hutcheson, Jr.......................... 25,000(/1/) *
Victor M. Perez.................................. 214,640(/1/) *
Michael D. Cain.................................. 39,000(/1/) *
Kenneth W. Bourgeois............................. 43,000(/1/) *
All directors and executive officers as a group
(12 persons).................................... 5,424,298(/4/) 21.1%
Inverness/Phoenix Partners LP.................... 3,866,539(/5/) 15.1%
</TABLE>
- --------
* Less than one percent
(1) Includes the following number of shares subject to options that are
exercisable by July 8, 1999: Mr. Fairley, 458,540; Mr. Palmer, 408,926;
Mr. Dunwoody, 10,000; Mr. Comis, 10,000; Mr. Acord, 14,000; Mr. Bailar
4,000; Mr. Greimann 4,000; Mr. Hutcheson 4,000; Mr. Perez, 214,640; Mr.
Cain, 39,000; and Mr. Bourgeois, 43,000.
(2) Includes 4,000,000 shares of Common Stock acquired by the Investors
pursuant to the terms of the Purchase Agreement.
(3) Shares beneficially owned by Mr. Bailar (excluding shares subject to
options that are currently exercisable) are owned by a trust of which Mr.
Bailar is the sole trustee and beneficiary.
(4) Includes 1,226,856 shares subject to options that are exercisable by July
8, 1999 held by executive officers and directors.
(5) The address of Inverness/Phoenix Partners LP, of which Messrs. Comis and
Dunwoody are principals, is 660 Steamboat Road, Greenwich, Connecticut
06830.
7
<PAGE>
EXECUTIVE COMPENSATION
Annual Compensation
The following table sets forth all cash compensation and options granted for
the three years ended December 31, 1998, to the Company's Chief Executive
Officer and each of its four most highly compensated executive officers
(collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
--------------------------------------- ------------
No. of
Shares
Underlying
Name and Principal Other Annual Options All Other
Position Year Salary Bonus Compensation(/1/) Granted Compensation
------------------ ---- -------- ------- ----------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Fairley....... 1998 $210,000 $35,000 $-- 16,000 $1,890
President and Chief 1997 $210,000 $95,970 $-- 12,000 $1,260
Executive Officer 1996 $150,000 $90,000 $-- 20,000 $1,134
Ronald O. Palmer........ 1998 $210,000 $35,000 $-- 16,000 $1,890
Chairman of the Board 1997 $210,000 $95,970 $-- 12,000 $1,260
1996 $150,000 $90,000 $-- 20,000 $1,134
Victor M. Perez......... 1998 $150,000 $25,000 $-- 15,000 $1,350
Vice President, Chief 1997 $150,000 $68,550 $-- 12,000 $1,104
Financial 1996 $135,000 $81,000 $-- 20,000 $1,068
Officer and Treasurer
Kenneth W. Bourgeois.... 1998 $105,000 $20,000 $-- 12,000 $ 945
Vice President and 1997 $105,000 $30,000 $-- 12,000 $ 753
Controller 1996 $ 90,000 $34,000 $-- 20,000 $ 728
Michael D. Cain......... 1998 $ 86,667 $15,000 $-- 12,000 $ 780
Vice President-- 1997 $ 80,000 $30,500 $-- 12,000 $ 624
Marketing 1996 $ 80,000 $24,500 $-- 20,000 $ 485
</TABLE>
- --------
(1) Perquisites and other personal benefits paid to each Named Executive
Officer in any of the years presented did not exceed the lesser of $50,000
or 10% of such Named Executive Officer's salary and bonus for that year.
1998 Stock Option Grants
The following table contains information concerning the grant of stock
options and stock appreciation rights ("SARs") to the Named Executive Officers
during 1998.
1998 STOCK OPTION GRANTS
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed Annual
Rates of Stock
No. of % of Total Price
Shares Options Appreciation for
Underlying Granted Option Term(/2/)
Options to Employees Exercise Expiration -----------------
Name Granted(/1/) in 1998 Price Date 5% 10%
---- ------------ ------------ -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Fairley....... 16,000 7.6% $17.75 2/9/08 $178,606 $452,623
Ronald O. Palmer........ 16,000 7.6% $17.75 2/9/08 $178,606 $452,623
Victor M. Perez......... 15,000 7.1% $17.75 2/9/08 $167,443 $424,334
Kenneth W. Bourgeois.... 12,000 5.7% $17.75 2/9/08 $133,954 $339,467
Michael D. Cain......... 12,000 5.7% $17.75 2/9/08 $133,954 $339,467
</TABLE>
- --------
(1) These options became exercisable in annual 25% increments beginning on
February 9, 1999 and on each anniversary thereafter.
(2) Appreciation is calculated over the term of the options, beginning with the
fair market value on the date of grant of the options, which was $17.75.
8
<PAGE>
AGGREGATE OPTION EXERCISES DURING 1998 AND OPTION VALUES AT YEAR END
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at Year End (#) at Year End(/1/)
Acquired on Value ------------------------- -------------------------
Name Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------ -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Thomas E. Fairley....... 7,850 $ 83,788 451,540/25,000 $1,699,161/--
Ronald O. Palmer........ 55,500 $866,772 391,926/25,000 $1,462,792/--
Victor M. Perez......... 10,000 $221,890 207,890/24,000 $ 733,089/--
Kenneth W. Bourgeois.... -- -- 37,000/21,000 $ 55,510/--
Michael D. Cain......... -- -- 33,000/21,000 $ 39,650/--
</TABLE>
- --------
(1) Based on the difference between the closing sale price of Common Stock of
$4.875 on December 31, 1998, as reported by the Nasdaq National Market and
the exercise price of such options.
Change of Control Agreements
The Company has entered into agreements with certain of its executive
officers, including the Named Executive Officers, which, among other things,
provide for certain payments and benefits to the executive if his or her
employment is terminated. If the officer's employment is terminated for any
reason other than cause, defined as (i) a conviction or a plea of nolo
contendere to a felony, (ii) gross negligence in the performance of the
officer's duties, continuing after the officer's receipt of notice of such
gross negligence from the Company, (iii) a material violation of the terms of
the employment agreement or (iv) gross misconduct on the officer's part that
is injurious to the Company, he will receive one year's salary, any cash bonus
still payable from the year preceding the officer's termination and any non-
cash benefits that he received prior to termination. The officer will receive
the same severance package in the event of a change of control of the Company
that is not initiated by someone who is or has been an employee of the
Company. In the case of a change in control initiated by a present or past
employee of the Company, the officer has the option either to receive the
severance package or continue in his position with the Company.
Compensation Committee Interlocks and Insider Participation
No executive officer of the Company served in 1998 as a director, or member
of the compensation committee, of another entity one of whose executive
officers served as a director, or on the Compensation Committee, of the
Company.
Compensation Committee's Report on Executive Compensation
General
The Compensation Committee, which is currently comprised of two non-employee
directors, oversees the compensation of the Company's key employees and
administers the Company's incentive compensation plans. No member of the
Compensation Committee is a former or current officer or employee of the
Company.
The compensation of the Company's executive officers is designed to attract
and retain executive talent and to align the compensation of the Company's
executives with the success of the Company. Toward that end, the Company's
executive compensation program has been structured to (i) provide a total
compensation package that is competitive with the compensation of executives
holding similar positions at comparable firms; (ii) reward individual and
overall Company performance; and (iii) link executive compensation to
achievement of the Company's long-term and short-term strategic goals.
Base Salary and Annual Incentive Compensation
Base Salary. The Compensation Committee establishes the base salaries of the
Company's key employees at levels it deems necessary to attract and retain
executive talent. Generally, base salaries for executives are
9
<PAGE>
reviewed annually and, if appropriate, adjusted based on individual
performance, increases in general levels of compensation for executives at
comparable firms and the Company's overall financial results.
Annual Cash Incentive Compensation. Annual cash incentive bonuses are paid
to the Company's key employees in an effort to provide a fully competitive
compensation package, which is linked to the Company's attainment of its
short-term goals. The Board views EBITDA (earnings before interest, taxes,
depreciation and amortization) growth as the Company's primary short-term
strategic goal. In 1998, primarily as a result of the significant decrease in
day rates in the Gulf of Mexico during the second half of 1998, annual bonuses
paid to the Company's executive officers substantially decreased and were
based, in part, on the EBITDA levels generated by the Company.
Stock-Based Incentive Compensation. The purpose of the Company's stock
incentive program is to link management to stockholders by focusing on
intermediate and long-term results. In 1998, the Committee sought to
accomplish these objectives by granting stock options to certain of the
Company's key employees.
Position Regarding Compliance with Section 162(m) of the Internal Revenue
Code. Section 162(m) of the Internal Revenue Code of 1986, as amended, limits
the deduction allowable to the Company for compensation paid to each of the
Named Executive Officers in any year to $1 million. Qualified performance-
based compensation is excluded from this deduction limitation if certain
requirements are met. Stock options granted by the Company have been
structured to qualify as performance-based. Although no executive officer of
the Company reached the deductibility cap in 1998, the Committee plans to
continue to evaluate the Company's cash and stock incentive programs as to the
advisability of future compliance with Section 162(m).
Compensation for the Chief Executive Officer
Mr. Fairley's salary remained at $210,000 in 1998. His base salary has been
established by considering various factors, including his experience and
performance and the extent to which his total compensation package is at risk
under incentive compensation programs.
An annual incentive bonus of $35,000 was paid to Mr. Fairley in 1998. While
the Company did not achieve the EBITDA target in its annual bonus plan for Mr.
Fairley due primarily to the substantial decrease in day rates experienced in
the Gulf of Mexico in the second half of 1998, Mr. Fairley was awarded a
$35,000 bonus in recognition of his leadership during 1998.
During 1998, Mr. Fairley received grants of stock options for 16,000 shares
of Common Stock as discussed above. Mr. Fairley's stock options were granted
on the same terms as those granted to other officers and described in this
report.
The Compensation Committee
Garth H. Greimann Edward C. Hutcheson, Jr.
10
<PAGE>
Performance Graph
The graph below compares the total stockholder return on the Company's
Common Stock since its initial public offering on May 16, 1996 until December
31, 1998 with the total return on the S&P 500 Index and the Company's Peer
Group Index for the same period, in each case assuming the investment of $100
on May 16, 1996 at the initial public offering price of $8.00 per share (as
adjusted to give effect to a 2 for 1 stock split effected in June, 1997) . The
Company's Peer Group Index consists of Petroleum Helicopters, Inc., Offshore
Logistics, Inc. (OLOG), Tidewater Inc. (TDW), SEACOR SMIT, Inc. (CKH) and
Hvide Marine Incorporated Class A Common Stock (HMAR). The initial public
offering of the Class A Common Stock of HMAR was on August 13, 1996.
COMPARE CUMULATIVE TOTAL RETURN
AMONG TRICO MARINE SERVICES, INC.,
S&P 500 INDEX AND PEER GROUP INDEX
[Graph appears here]
ASSUMES $100 INVESTED ON MAY 16, 1996
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING DEC. 31, 1998
<TABLE>
<CAPTION>
Total Return
------------------------------------------------------------------
May 16, 1996 December 31, 1996 December 31, 1997 December 31, 1998
------------ ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Trico................... 100 300 367 61
S&P 500................. 100 112 149 192
Peer Group Index........ 100 114 135 65
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and 10% stockholders to file with the SEC
reports of ownership and changes in ownership of equity securities of the
Company. During 1998, statements on Form 4 with respect to H. K. Acord, a
director of the Company, and Ronald O. Palmer, Chairman of the Board, were not
timely filed due to clerical errors.
11
<PAGE>
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
The Company's consolidated financial statements for the year ended December
31, 1998, were audited by the firm of PricewaterhouseCoopers LLP. Under the
resolution appointing PricewaterhouseCoopers LLP to audit the Company's
financial statements, such firm will remain as the Company's auditors until
replaced by the Board. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Meeting, with the opportunity to make any
statement they desire at that time, and will be available to respond to
appropriate questions.
OTHER MATTERS
Quorum and Voting of Proxies
The presence, in person or by proxy, of a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum. Stockholders voting, or
abstaining from voting, by proxy on any issue will be counted as present for
purposes of constituting a quorum. If a quorum is present, the election of
directors is determined by plurality vote. The affirmative vote of a majority
of the outstanding common stock is generally required to approve other
proposals that may be properly brought before the Meeting. An abstention will
have the effect of a vote against the proposals. If brokers do not receive
instructions from beneficial owners as to the granting or withholding of
proxies and may not or do not exercise discretionary power to grant a proxy
with respect to such shares (a "broker non-vote") on the proposals, shares not
voted on the proposals as a result will be counted as not present and not cast
with respect to the proposals.
All proxies received by the Company in the form enclosed will be voted as
specified and, in the absence of instructions to the contrary, will be voted
for the election of the nominees named herein. The Company does not know of
any matters to be presented at the Meeting other than those described herein.
However, if any other matters properly come before the Meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares
represented by them in accordance with their best judgment.
Stockholder Proposals and Director Nominations
For any person other than a person nominated by the Board to be eligible for
nomination for election as a director, advance notice must be provided to the
Company's Secretary not more than 270 days and not less than 60 days in
advance of the anniversary of the preceding year's annual meeting of
stockholders. This notice shall state (i) the name and business and
residential addresses of the nominating stockholder and any person acting in
concert with the nominating stockholder, (ii) the number of shares of Common
Stock owned by the nominating stockholder and the dates on which these shares
were acquired, (iii) a representation that the nominating stockholder intends
to appear in person or by proxy at the Meeting to make the proposed
nomination, (iv) a description of all arrangements or understandings between
the nominating stockholder, any person acting in concert with the nominating
stockholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the nominating stockholder, and (v) the name, age and business and
residential addresses of each proposed nominee, each proposed nominee's
principal occupation or employment and the number of shares of Common Stock
beneficially owned by each proposed nominee along with such other information
regarding each proposed nominee as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the SEC, had the nominee been
proposed by the Board.
12
<PAGE>
Eligible stockholders who desire to present a proposal qualified for
inclusion in the proxy materials relating to the Company's 2000 annual meeting
pursuant to regulations of the Securities and Exchange Commission, must
forward such proposals to the Secretary of the Company at the address listed
on the first page of this Proxy Statement in time to arrive at the Company
prior to January 6, 2000. Under the Company's By-laws, advance notice of
stockholder proposals must be received by April 9, 2000 in order to be
considered at the 2000 annual meeting.
By Order of the Board of Directors
/s/ Victor M. Perez
Victor M. Perez
Secretary
Houma, Louisiana
May 7, 1999
13
<PAGE>
Annex A
PURCHASE AGREEMENT
By and Among
Trico Marine Services, Inc.
Inverness/Phoenix Partners LP,
and
Executive Capital Partners I LP
Common Stock, par value $.01 per share
April 16, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I.
DEFINITIONS........................................................... A-1
Section 1.1 Definitions............................................. A-1
Section 1.2 References and Titles................................... A-4
ARTICLE II.
PURCHASE OF THE SECURITIES............................................ A-4
Section 2.1 Purchase of the Shares.................................. A-4
Section 2.2 Commitment Fee.......................................... A-4
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................... A-5
Section 3.1 Organization, Standing and Power........................ A-5
Section 3.2 Subsidiaries............................................ A-5
Section 3.3 Capital Structure....................................... A-5
Section 3.4 Authority; No Violations; Approvals..................... A-6
Section 3.5 SEC Documents........................................... A-6
Section 3.6 Absence of Certain Changes or Events.................... A-7
Section 3.7 No Undisclosed Material Liabilities..................... A-7
Section 3.8 Compliance with Applicable Laws......................... A-7
Section 3.9 Litigation.............................................. A-7
Section 3.10 Permits................................................. A-8
Section 3.11 Title to Properties; Condition.......................... A-8
Section 3.12 Vessels................................................. A-8
Section 3.13 Certain Agreements...................................... A-8
Section 3.14 Tax Returns and Tax Payments............................ A-9
Section 3.15 Employee Benefit Plans.................................. A-9
Section 3.16 Labor Matters........................................... A-9
Section 3.17 Intangible Property..................................... A-10
Section 3.18 Environmental Matters................................... A-10
Section 3.19 Insurance............................................... A-10
Section 3.20 No Brokers or Finders................................... A-10
Section 3.21 Vote.................................................... A-10
Section 3.22 Internal Procedures..................................... A-10
Section 3.23 Ability to Meet Obligations............................. A-11
Section 3.24 Relationships with Related Persons...................... A-11
Section 3.25 Restrictions on Business Activities..................... A-11
Section 3.26 Certain Business Practices.............................. A-11
Section 3.27 Disclosure.............................................. A-11
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...................... A-12
Section 4.1 Organization, Standing and Power........................ A-12
Section 4.2 Authority; Approvals.................................... A-12
Section 4.3 Investment Intent....................................... A-12
Section 4.4 Purchaser Inquiry....................................... A-12
Section 4.5 Transfer Restrictions................................... A-12
Section 4.6 Purchaser Status........................................ A-13
Section 4.7 Sufficient Funds........................................ A-13
Section 4.8 Citizenship............................................. A-13
Section 4.9 Brokers or Finders...................................... A-13
</TABLE>
A-i
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE V.
COVENANTS........................................................ A-13
Section 5.1 Confidentiality................................... A-13
Section 5.2 Conduct of Business............................... A-14
Section 5.3 Approvals......................................... A-15
Section 5.4 HSR Act Notification.............................. A-15
Section 5.5 Notification of Certain Matters................... A-15
Section 5.6 Directors......................................... A-15
Section 5.7 Indemnification of Directors...................... A-15
Section 5.8 Listing........................................... A-16
Section 5.9 Stockholders' Meeting; Proxy Statement............ A-16
Section 5.10 Rights Plan Amendment............................. A-16
Section 5.11 Use of Proceeds................................... A-17
ARTICLE VI.
CONDITIONS PRECEDENT TO CLOSING.................................. A-17
Section 6.1 Conditions Precedent to Each Party's Obligation... A-17
Section 6.2 Conditions Precedent to Obligation of the
Purchasers........................................ A-17
Section 6.3 Conditions Precedent to Obligations of the
Company........................................... A-18
ARTICLE VII.
CLOSINGS......................................................... A-18
Section 7.1 First Closing..................................... A-18
Section 7.2 Actions to Occur at the First Closing............. A-19
Section 7.3 Second Closing.................................... A-19
Section 7.4 Actions to Occur at the Second Closing............ A-19
ARTICLE VIII.
TERMINATION...................................................... A-20
Section 8.1 Termination....................................... A-20
Section 8.2 Effect of Termination............................. A-20
ARTICLE IX.
RECOVERY OF FEES................................................. A-21
ARTICLE X.
MISCELLANEOUS.................................................... A-21
Section 10.1 Survival of Provisions............................ A-21
Section 10.2 No Waiver; Modification in Writing................ A-21
Section 10.3 Specific Performance.............................. A-21
Section 10.4 Severability...................................... A-21
Section 10.5 Fees and Expenses................................. A-22
Section 10.6 Parties in Interest............................... A-22
Section 10.7 Notices........................................... A-22
Section 10.8 Counterparts...................................... A-22
Section 10.9 Entire Agreement.................................. A-22
Section 10.10 Governing Law..................................... A-23
Section 10.11 Public Announcements.............................. A-23
Section 10.12 Assignment........................................ A-23
Section 10.13 Director and Officer Liability.................... A-23
Section 10.14 Headings.......................................... A-23
Exhibits and Annexes
Exhibit 2.1 Allocation of Purchase Price
Annex A Stockholders' Agreement
</TABLE>
A-ii
<PAGE>
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of April 16, 1999, by and among Trico Marine
Services, Inc., a Delaware corporation (together with its successors, if any,
the "Company"), and Inverness/Phoenix Partners LP, a Delaware limited
partnership, and Executive Capital Partners I LP, a Delaware limited
partnership (collectively, the "Purchasers").
In consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
Definitions
Section 1.1 Definitions. In addition to the other defined terms used in this
Agreement, and unless the context requires a different meaning, the following
terms have the meanings indicated:
"Affiliate" means, with respect to any Person, any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person. For purposes of this definition and
this Agreement, the term "control" (and correlative terms "controlling,"
"controlled by" and "under common control with") means possession of the
power, whether by contract, equity ownership or otherwise, to direct the
policies or management of a Person.
"Agreement" means this Purchase Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with the terms
hereof.
"Applicable Law" means any constitutional provision, statute or other law,
ordinance, rule, regulation or interpretation of any thereof and any Order of
any Governmental Entity (including Environmental Laws).
"Approval" means any approval, authorization, grant of authority, consent,
order, qualification, permit, license, variance, exemption, franchise,
concession, certificate, filing or registration or any waiver of the
foregoing, or any notice, statement or other communication required to be
filed with, delivered to or obtained from any Governmental Entity or any other
Person.
"Board" means the Board of Directors of the Company.
"Business Day" means any day except Saturday, Sunday and any day which shall
be a legal holiday or a day on which banking institutions in Houston, Texas or
New York City, New York generally are authorized or required by law or other
government actions to close.
"Bylaws" mean the Company's bylaws, as amended from time to time.
"Capital Stock" means (1) with respect to any Person that is a corporation
or company, any and all shares, interests, participations or other equivalents
(however designated) of capital or capital stock of such Person and (2) with
respect to any Person that is not a corporation or company, any and all
partnership or other equity interests of such Person.
"Certificate of Incorporation" means the Company's Amended and Restated
Certificate of Incorporation, as amended from time to time.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations thereunder as in effect on the date hereof.
"Common Stock" means the Company's common stock, par value $.01 per share.
A-1
<PAGE>
"Confidential Information" means all information about the Company furnished
to the Purchasers or any of their Representatives by the Company or any of its
Representatives, but shall exclude information that (i) is in the possession
of the Purchasers or their Representatives prior to receipt from the Company,
(ii) is or becomes available in the public domain, other than as a result of
an unauthorized disclosure by Purchasers or its Representatives, or (iii) is
not acquired from the Company or any other person known by the Purchasers or
its Representatives to be subject to a confidentiality agreement with the
Company.
"Contractual Obligation" means, as to any Person, any loan or credit
agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other contract, agreement, arrangement or
understanding, written or otherwise, to which such Person is a party or by
which it or any of its property is bound.
"Credit Agreements" means, (1) that certain Second Amended and Restated
Revolving Credit Agreement, dated as of March 13, 1998, among the Company, as
borrower, BankBoston, N.A., as administration agent, and the lenders signatory
thereto, as amended by Amendment No. 1 thereto, dated as of December 31, 1998,
and as the same may from time to time be amended or supplemented and (2) that
certain Loan Agreement, dated as of June 23, 1998, among Saevik Shipping AS,
as borrower, Den Norske Bank ASA, as agent, and the other lending institutions
that may become party thereto from time to time in accordance with the terms
thereof, as the same may from time to time be amended or supplemented.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section
414 of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"First Tranche" means the 4,000,000 shares of Common Stock to be purchased
by the Purchasers at the First Closing.
"Governmental Entity" means any agency, bureau, commission, court,
authority, department, official, political subdivision, tribunal or other
instrumentality of any government, whether (1) regulatory, administrative or
otherwise, (2) federal, state or local, or (3) domestic or foreign.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
"Indenture" means the Indenture, dated as of September 22, 1998, among Trico
Marine Services, Inc., the guarantors listed on the signature page thereto and
Chase Bank of Texas, National Association, as trustee, as the same may from
time to time be amended or supplemented.
"Knowledge" of any Person means the actual knowledge of such Person's
executive and financial officers and directors, in each case after reasonable
inquiry of such other officers of such Person with direct responsibility for
the Person's business relating to such knowledge.
"Lien" means any mortgage, lien, pledge, encumbrance, easement, charge or
security interest of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Material" means material in relation to the business, operations,
properties, condition (financial or otherwise), results of operations, assets,
liabilities or prospects of the Company and its Subsidiaries taken as a whole.
A-2
<PAGE>
"Material Adverse Effect" means any effect, change, event or occurrence that
(1) is materially adverse to the business, operations, properties, condition
(financial or otherwise), results of operations, prospects, assets or
liabilities of the Company and its Subsidiaries taken as a whole, (2) has
impaired and could impair the ability of the Company to perform its
obligations under any of the Transaction Documents in any material respect, or
(3) could delay in any material respect or prevent the consummation of any of
the transactions contemplated by any of the Transaction Documents.
"Order" means any decree, injunction, judgment, settlement, order, ruling,
assessment or writ of a court.
"Partner" means, with respect to any Purchaser, any limited partner or
general partner of such Purchaser or any of such Purchaser's Affiliates,
whether or not such limited partner or general partner is an Affiliate of such
Purchaser.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Proceedings" means actions, causes of action, suits, claims, complaints,
demands, litigations or legal, administrative or arbitral proceedings.
"Representatives" of any Person means the officers, directors, employees,
agents and other representatives of such Person.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and bylaws or other organizational or governing documents of
such Person, and any law, treaty, rule, regulation, ordinance, qualification,
license or franchise or determination (including, without limitation, those
related to taxes and to environmental matters) of an arbitrator or a court or
other Governmental Entity or of the Nasdaq National Market or any national
securities exchange on which the Common Stock is listed or admitted to
trading, in each case applicable or binding upon such Person or any of its
property or to which such Person or any of its property is subject or
pertaining to any or all of the transactions contemplated hereby.
"SEC" means the Securities and Exchange Commission.
"Second Tranche" means the 4,000,000 shares of Common Stock to be purchased
by the Purchasers at the Second Closing.
"Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
"Shares" means the shares of Common Stock constituting the First Tranche and
the Second Tranche purchased by the Purchasers pursuant to this Agreement.
"Stockholders' Agreement" means that certain Stockholders' Agreement, in the
form attached hereto as Annex A, among the Company and the Purchasers, dated
as of the date hereof.
"Subsidiary" means, (1) a corporation, a majority of whose stock with voting
power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by the Company, by a Subsidiary of the Company
or by the Company and another Subsidiary, or (2) any other Person (other than
a corporation) in which the Company, a Subsidiary or the Company and a
Subsidiary, directly or indirectly, at the date of determination thereof has
at least a majority ownership interest.
"Transaction Documents" means this Agreement and the Stockholders'
Agreement.
A-3
<PAGE>
Section 1.2 References and Titles. All references in this Agreement to
Exhibits, Schedules, Articles, Sections, subsections, and other subdivisions
refer to the corresponding Exhibits, Schedules, Articles, Sections,
subsections, and other subdivisions of this Agreement unless expressly
provided otherwise. Titles appearing at the beginning of any Articles,
Sections, subsections, or other subdivisions of this Agreement are for
convenience only, do not constitute any part of such Articles, Sections,
subsections or other subdivisions, and shall be disregarded in construing the
language contained therein. The words "this Agreement," "herein," "hereby,"
"hereunder," and "hereof," and words of similar import, refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited. The words "this Section," "this subsection," and words of similar
import, refer only to the Sections or subsections hereof in which such words
occur. The word "including" (in its various forms) means "including without
limitation." Pronouns in masculine, feminine, or neuter genders shall be
construed to state and include any other gender and words, terms, and titles
(including terms defined herein) in the singular form shall be construed to
include the plural and vice versa, unless the context otherwise expressly
requires. Unless the context otherwise requires, all defined terms contained
herein shall include the singular and plural forms of such defined terms.
ARTICLE II.
Purchase of the Securities
Section 2.1 Purchase of the Shares.
(a) Subject to the terms and conditions herein set forth, the Company will
sell to the Purchasers, and the Purchasers will purchase from the Company, the
First Tranche and the Second Tranche, as allocated among the Purchasers as set
forth in Exhibit 2.1.
(b) The aggregate purchase price payable for the First Tranche shall be
$25,000,000.00 (the "First Tranche Purchase Price") and the aggregate purchase
price payable for the Second Tranche shall be $25,000,000.00 (the "Second
Tranche Purchase Price").
(c) Delivery of the shares of Common Stock constituting the First Tranche
shall be made at the First Closing by delivery to the Purchasers, against
payment of the First Tranche Purchase Price therefor as provided herein, of
one or more share certificates, registered in the name and amounts requested
by the Purchasers at least two Business Days prior to the First Closing,
representing an aggregate of 4,000,000 shares of Common Stock, all to be
purchased at the First Closing by the Purchasers hereunder.
(d) Delivery of the shares of Common Stock constituting the Second Tranche
shall be made at the Second Closing by delivery to the Purchasers, against
payment of the Second Tranche Purchase Price therefor as provided herein, of
one or more share certificates, registered in the name and amounts requested
by the Purchasers at least two Business Days prior to the Second Closing,
representing an aggregate of 4,000,000 shares of Common Stock, all to be
purchased at the Second Closing by the Purchasers hereunder.
(e) Payment of the First Tranche Purchase Price for the First Tranche and
payment of the Second Tranche Purchase Price for the Second Tranche to be
purchased hereunder shall be made by or on behalf of the Purchasers by wire
transfer of immediately available funds to an account of the Company (the
number for which account shall have been furnished to the Purchasers at least
two Business Days prior to the First Closing Date or the Second Closing Date,
as the case may be).
Section 2.2 Commitment Fee. The Company shall pay the Purchasers a
commitment fee of $2,000,000 (the "Commitment Fee"), $1,000,000 of which shall
be paid by the Company at the First Closing and the remaining $1,000,000 of
which shall be paid by the Company upon the earlier to occur of the Second
Closing or July 15, 1999, in each case, by wire transfer of immediately
available funds to an account of the Purchasers (the number for which account
shall have been furnished to the Company at least two Business Days prior to
the date of such payment).
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ARTICLE III.
Representations and Warranties of the Company
The Company represents and warrants to the Purchasers as follows:
Section 3.1 Organization, Standing and Power. Each of the Company and its
Subsidiaries: (a) has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation; (b) has all requisite corporate power and authority to carry on
its business as it is currently being conducted and as described in the SEC
Documents and to own, lease and operate its properties; and (c) is duly
qualified and in good standing as a foreign corporation, authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified could not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect. The Company
has all requisite corporate power and authority to enter into this Agreement
and the Stockholders' Agreement and to consummate each of the transactions and
perform each of the obligations contemplated hereby and thereby.
Section 3.2 Subsidiaries. All of the issued and outstanding capital stock
(or equivalent interests) of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company
free and clear of any Liens (other than Liens created pursuant to the Credit
Agreements), and there are no rights, options or warrants outstanding or other
agreements to acquire shares of capital stock (or equivalent interests) of
such Subsidiary. Except for the Company's Subsidiaries, the Company has no
Material interest or investments in any corporation, partnership, limited
liability company, trust or other entity or organization.
Section 3.3 Capital Structure.
(a) The authorized capital stock of the Company consists of 40,000,000
shares of Common Stock and 5,000,000 shares of preferred stock, par value $.01
per share, of which, as of the date of this Agreement, (1) 20,450,448 shares
of Common Stock are issued and 20,378,416 shares of Common Stock are
outstanding; (2) 100,000 shares of Series AA Participating Cumulative
Preference Stock were issued and outstanding; (3) 1,810,855 shares of Common
Stock have been authorized and are reserved for or subject to issuance upon
the exercise of outstanding options to purchase Common Stock granted under the
Company's director and employee stock incentive plans disclosed in the SEC
Documents; (4) 72,032 shares of Common Stock are held by the Company in its
treasury; and (5) no shares of Common Stock are held by any of the Company's
Subsidiaries. Except for shares of Common Stock issuable upon the exercise of
outstanding stock options granted under the director and employee stock
incentive plans disclosed in the SEC Documents, there are no shares of Common
Stock or any other equity security of the Company issuable upon conversion or
exchange of any security of the Company, nor are there any rights, options or
warrants outstanding or other agreements to acquire shares of capital stock of
the Company, nor will the Company be contractually obligated to issue any
shares of capital stock or to purchase, redeem or otherwise acquire any of its
outstanding shares of capital stock as a result of the transactions
contemplated hereby. None of the Company's outstanding debt or debt
instruments provide voting rights with respect to the Company to the holders
thereof. No stockholder of the Company or other Person is entitled to any
preemptive or similar rights to subscribe for shares of capital stock of the
Company. All of the issued and outstanding shares of Common Stock are, and the
Shares (when issued hereunder) after payment of the purchase price therefor to
the Company, will be, duly authorized, validly issued, fully paid,
nonassessable, and free and clear of all Liens (other than any such Liens
imposed by the Purchasers or any of their creditors). Except for the
registration rights granted pursuant to the Stockholders' Agreement, no Person
has the right to demand or request that the Company effect a registration
under the Securities Act of any securities held by such Person or to include
any securities of such Person in any such registration by the Company. Except
as described in this Section 3.3, the Company has no authorized, issued or
outstanding shares or capital stock as of the date of this Agreement.
(b) Except as contemplated hereby or in the Stockholders' Agreement or as
set forth in the SEC Documents, there are no registration rights agreements,
shareholder agreements, voting agreements or trusts, proxies or other
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agreements or contractual obligations to which the Company or any of its
Subsidiaries is a party or bound with respect to the registration with any
Government Entity, or the voting or disposition of any capital stock of the
Company or any of its Subsidiaries and, to the Company's Knowledge there are
no other shareholder agreements, voting agreements or trusts, proxies or other
agreements or contractual obligations among the shareholders of the Company
with respect to the voting or disposition of any capital stock of the Company
or any of its Subsidiaries.
Section 3.4 Authority; No Violations; Approvals.
(a) The Board has approved this Agreement, the Stockholders' Agreement and
the transactions contemplated hereby and thereby. The execution, delivery and
performance by the Company of this Agreement and the Stockholders' Agreement
and the transactions contemplated hereby and thereby, (1) have been duly
authorized by all necessary corporate action of the Company; (2) do not
contravene the terms of the certificate of incorporation or bylaws of the
Company or the organizational documents of its Subsidiaries; and (3) do not
violate or result in any breach or contravention of, a default under, or an
acceleration of any obligation under or the creation (with or without notice,
lapse of time or both) of any Lien under, any Contractual Obligation of the
Company or its Subsidiaries or any Requirement of Law applicable to the
Company or its Subsidiaries. No event has occurred and no condition exists
that (upon notice or the passage of time or both) would constitute, or give
rise to: (1) any breach, violation, default, change of control or right to
cause the Company to repurchase or redeem under; (2) any Lien on the assets of
the Company or any of its Subsidiaries under; (3) any termination right of any
part under; or (4) any change or acceleration in the rights or obligations of
any party under, any Contractual Obligation of the Company or its Subsidiaries
or any Order or Requirement of Law applicable to the Company or any of its
Subsidiaries, except for any such breach, violation, default, acceleration,
creation or change that does not, individually or in the aggregate, have a
Material Adverse Effect.
(b) No Approval of any Governmental Entity or any other Person in respect of
any Requirement of Law, Contractual Obligation or otherwise, and no lapse of a
waiting period under a Requirement of Law, is necessary or required in
connection with the execution, delivery or performance (including, without
limitation, the sale, issuance and delivery of the Shares) by the Company, or
enforcement against the Company, of this Agreement or the transactions
contemplated thereby, except for the filing of a notification report by the
Company under the HSR Act and the expiration or termination of the applicable
waiting period with respect thereto.
(c) This Agreement has been, and the Stockholders' Agreement when executed
and delivered will be, duly executed and delivered by the Company and
constitutes, or will constitute, the legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms.
Section 3.5 SEC Documents.
(a) The Company has made available to the Purchasers a true and complete
copy of each report, schedule, registration statement and definitive proxy
statement filed by the Company with the SEC since December 31, 1997 (the "SEC
Documents"), which are all the documents (other than preliminary materials)
that the Company was required to file with the SEC since December 31, 1997. As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act, or the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
SEC Documents, and none of the SEC Documents contained as of their respective
dates any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The financial statements of the Company included in the SEC Documents,
including the notes and schedules thereto, complied as to form in all material
respects with the rules and regulations of the SEC with respect thereto, were
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC)
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and fairly present the consolidated financial position of the Company and its
consolidated Subsidiaries as of their respective dates and the consolidated
results of operations and the consolidated cash flows of the Company and its
consolidated Subsidiaries for the periods presented therein in accordance with
applicable requirements of GAAP (subject, in the case of the unaudited
statements, to normal, recurring adjustments, none of which are material)
applied on a consistent basis during the periods presented.
Section 3.6 Absence of Certain Changes or Events.
(a) Except as disclosed in the SEC Documents filed with the SEC after
December 31, 1998 and prior to the date of this Agreement, or except as
contemplated by this Agreement, since December 31, 1998, each of the Company
and its Subsidiaries have conducted their business only in the ordinary course
of business consistent with past practice, and there has not been: (1) any
declaration, setting aside or payment of any dividend or other distribution by
the Company (whether in cash, stock or property) with respect to any capital
stock of the Company or any of its Subsidiaries; (2) any split, combinations,
reclassification or amendment of any term of any outstanding capital stock or
other security of the Company; (3) other than issuance of Common Stock upon
the exercise of outstanding options to purchase Common Stock granted under the
Company's director and employee stock incentive plans disclosed in the SEC
Documents, any issuance or the authorization of the issuance of any equity
securities of the Company or any of its Subsidiaries, other than in connection
with the transactions contemplated hereby; (4) any repurchase, redemption or
other acquisition by the Company or any Subsidiary of the Company of any
outstanding capital stock or other securities of the Company or any Subsidiary
of the Company; (5) (A) any grant by the Company or any of its Subsidiaries to
any officer of the Company or any of its Subsidiaries of any increase in
compensation, except for increases in the ordinary course of business
consistent with past practice or (B) any grant by the Company or any of its
Subsidiaries to any such officer of any increase in severance or termination
pay, except as was required or provided for under any employment, severance,
termination or other agreements or benefit arrangements in effect as of
December 31, 1998; (6) except as required by a change in GAAP, any material
change in accounting methods, principles or practices by the Company or any of
its Subsidiaries; or (7) any material casualties affecting the Company and its
Subsidiaries, taken as a whole, or any material loss, damage or destruction to
any of their properties or assets, whether covered by insurance or not.
(b) Except as disclosed in the Company's consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, and the notes thereto since December 31, 1998, there has
not been any event, circumstance or fact that has had or could reasonably be
expected to have a Material Adverse Effect.
Section 3.7 No Undisclosed Material Liabilities. Neither the Company nor any
of its Subsidiaries has any liabilities or obligations of any nature, whether
or not accrued, contingent or otherwise, except (a) liabilities or obligations
disclosed or reserved against in the SEC Documents filed prior to the date
thereof or (b) liabilities or obligations which could not have, individually
or in the aggregate, have not had, and could not reasonably be expected to
have, a Material Adverse Effect.
Section 3.8 Compliance with Applicable Laws. Except as would not have a
Material Adverse Effect, the Company and each of its Subsidiaries: (a) in the
conduct of its business, is not, and since December 31, 1998, has not been, in
violation of any Requirement of Law; (b) has all Approvals, which are in full
force and effect, and has made all filings, applications and registrations
with, all Governmental Entities that are required in order to permit it to
conduct its businesses in all Material respects as presently conducted; and
(c) since December 31, 1998, has received no notification or communication
from any Governmental Entity (1) asserting that it is not in compliance with
any of the Requirements of Law that such Governmental Entity enforces or (2)
threatening to revoke any Approval.
Section 3.9 Litigation.
(a) There are no Proceedings pending or, to the Knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries or
relating to this Agreement or the transactions contemplated hereby,
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nor is there any Order of any Governmental Entity or arbitrator outstanding
against or binding upon the Company or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
(b) There are no Orders restricting or limiting in any Material respect the
business or operations of the Company or any of its Subsidiaries, to which the
Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries or any of their respective assets or properties are bound.
Section 3.10 Permits. Each of the Company and its Subsidiaries has such
permits, licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate their
respective properties and to conduct their businesses, except as could not
reasonably be expected to have a Material Adverse Effect. Each of the Company
and its Subsidiaries has fulfilled and performed all of its obligations with
respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
could result in any other material impairment of the rights of the holder of
any such permit, except as could not reasonably be expected to have a Material
Adverse Effect. Except as described in the SEC Documents, such permits contain
no restrictions that are or will be materially burdensome to the Company or
such Subsidiary, as the case may be.
Section 3.11 Title to Properties; Condition. The Company or its Subsidiaries
owns, of record (to the extent applicable) and beneficially, all material
personal property and real property and has a valid and enforceable leasehold
interest in all material leases, in each case, as reflected in the
consolidated financial statements of the Company included in the SEC Documents
as being owned or leased by it or any of its Subsidiaries and all such
property thereafter acquired by it or any of its Subsidiaries (except to the
extent that such properties have thereafter been disposed of in the ordinary
course of business consistent with past practice or after the date hereof in
compliance with Section 5.2), free and clear of any Liens (other than Liens
created pursuant to the Credit Agreements), except in each case as could not
reasonably be expected to have a Material Adverse Effect. To the Company's
Knowledge, each piece of personal property other than the vessels currently in
use by the Company or its Subsidiaries is free from defects (patent and
latent), has been maintained in accordance with normal industry practice, is
in good operating condition and repair (subject to normal wear and tear), and
is suitable for the purposes for which it presently is used.
Section 3.12 Vessels. The Company and its Subsidiaries own and operate all
of their vessels in all Material respects in accordance with Applicable Law.
To the Company's Knowledge, each of the vessels presently operated by the
Company and its Subsidiaries, or upgraded pursuant to the Company's capital
improvement program, is free from any Material defects (patent and latent),
has been maintained in accordance with normal industry practice, is in good
operating condition and repair (subject to normal wear and tear), and is
suitable to be used for the purposes for which it presently is used.
Section 3.13 Certain Agreements.
(a) All of the Company's Contractual Obligations that are required to be
described in the SEC Documents or to be filed as exhibits thereto ("Material
Contracts") are described in the SEC Documents or filed as exhibits thereto,
as so required. Each Material Contract is a valid and binding agreement of the
Company or its Subsidiaries, as the case may be, enforceable in accordance
with its terms, and neither the Company nor any of its Subsidiaries is in
breach of or in default under any Material Contract except for such breaches
and defaults that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(b) The Company or the relevant Subsidiary and, to the Company's Knowledge,
each other party to the Material Contracts has performed in all material
respects the obligations required to be performed by it under the Material
Contracts and is not (with or without lapse of time or the giving of notice,
or both) in breach or default thereunder. No party to any Material Contract
has given written or, to the Company's Knowledge, oral notice of any action to
terminate, cancel, rescind or procure a judicial reformation thereof.
(c) A complete copy of each Material Contract has been made available to the
Purchasers prior to the date of this Agreement.
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(d) Neither the Company nor any of its Subsidiaries is a party to any oral
or written agreement, plan or arrangement with any employee, consultant or
independent contractor of the Company or a Subsidiary (1) the benefits of
which are contingent, or the terms of which will be materially altered, upon,
or result from, the occurrence of the transactions contemplated by this
Agreement or (2) any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the occurrence of any of
the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of the transactions
contemplated by this Agreement.
(e) The Company has made available to the Purchasers (1) true and correct
copies of all material loan or credit agreements (including the Credit
Agreements), notes, bonds, mortgages, indentures and other agreements and
instruments pursuant to which any debt of the Company or any of its
Subsidiaries is outstanding or may be incurred and (2) accurate information
regarding the respective principal amounts currently outstanding thereunder to
the extent materially different than as set forth in the financial statements
included in the Company's annual report on Form 10-K for the year ended
December 31, 1998.
Section 3.14 Tax Returns and Tax Payments. The Company and its Subsidiaries
have filed all tax returns that are required to have been filed in any
jurisdiction, and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is
not individually or in the aggregate Material or (b) the amount, applicability
or validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect.
Section 3.15 Employee Benefit Plans.
(a) The Company has made available to Purchasers complete and correct copies
of all written plans under which the Company, any of its Subsidiaries or any
ERISA Affiliate, have any present or future obligations or liabilities in
respect of employees or former employees of the Company, any of its
Subsidiaries or any ERISA Affiliate or their dependents or beneficiaries
(individually, a "Plan").
(b) The Company and each ERISA Affiliate has operated and administered each
Plan in compliance with Applicable Law except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any ERISA
Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be expected to result
in the incurrence of any such liability by the Company or any ERISA Affiliate,
or in the imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate, in either case pursuant to Title I or IV
of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29)
or 412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
Section 3.16 Labor Matters. Except as set forth in the SEC Documents:
(a) there is no unfair labor practice charge or grievance arising out of
a collective bargaining agreement or other grievance procedure against the
Company or any of its Subsidiaries pending, or, to the Knowledge of the
Company, threatened, that, individually or in the aggregate, has had or
could reasonably be expected to have a Material Adverse Effect;
(b) there is no strike, dispute, slowdown, work stoppage or lockout
pending, or, to the Knowledge of the Company, threatened, against or
involving the Company or any of its Subsidiaries that, individually or in
the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect; or
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(c) there is no Proceeding pending or, to the Knowledge of the Company,
threatened, in respect to which any current or former director, officer,
employee or agent of the Company or any of its Subsidiaries is or may be
entitled to claim indemnification from the Company or any of its
Subsidiaries pursuant to (1) the Certificate of Incorporation or Bylaws of
the Company; (2) any provision of the comparable charter or organizational
documents of any of its Subsidiaries; (3) any indemnification agreement to
which the Company or any Subsidiary of the Company is a party; or (4)
Applicable Law.
Section 3.17 Intangible Property. Except as disclosed in the SEC Documents,
each of the Company and its Subsidiaries owns, possesses or has the right to
employ all licenses, trademarks, service marks and trade names, inventions,
computer programs, technical data and information (collectively, the
"Intellectual Property") presently employed by it in connection with the
businesses now operated by it free and clear of and without violating any
right, claimed right, charge, encumbrance, pledge, security interest,
restriction or lien of any kind of any other person, except where the failure
to own, possess, license or have the right to employ its Intellectual Property
could not reasonably be expected to have a Material Adverse Effect. To the
Company's Knowledge, the Company will not suffer any Material Adverse Effect
with respect to Year 2000 non-compliance.
Section 3.18 Environmental Matters. Neither the Company nor any of its
Subsidiaries has violated any foreign, federal, state or local law or
regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws") that could reasonably be expected to have
a Material Adverse Effect.
Section 3.19 Insurance. Each of the Company and its Subsidiaries maintains,
or the Company maintains on behalf of its Subsidiaries, insurance (including
self insurance) covering its or their properties, operations, personnel and
businesses, except as could not reasonably be expected to have a Material
Adverse Effect. Such insurance insures against such losses and risks as are
adequate in accordance with customary industry practice to protect the Company
and its Subsidiaries and their respective businesses, except as could not
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor its Subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other material expenditures
will have to be made in order to continue such insurance. All such insurance
is outstanding and duly in force on the date hereof, subject only to changes
made in the ordinary course of business, consistent with past practice, that
do not, singly or in the aggregate, materially alter the coverage thereunder
or the risks covered thereby and except where the failure to maintain such
insurance could not reasonably be expected to have a Material Adverse Effect.
Section 3.20 No Brokers or Finders. Except for fees payable to Bear Stearns
& Co., Inc., no agent, broker, finder or investment or commercial banker, or
other Person or firm engaged by or acting on behalf of the Company or its
Subsidiaries in connection with the negotiation, execution or performance of
this Agreement is or will be entitled to any brokerage or finder's or similar
fee or other commission as a result of this Agreement, the Stockholders'
Agreement or the transactions contemplated hereby or thereby.
Section 3.21 Vote. Except for the approval by the Company's stockholders of
the issuance of the shares of Common Stock constituting the Second Tranche,
there are no approvals required of the holders of any class or series of
shares or stock of the Company necessary to approve this Agreement or the
Stockholders' Agreement and the transactions contemplated hereby or thereby.
Section 3.22 Internal Procedures. Each of the Company and its Subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that: (a) transactions are executed in accordance with
management's general or specific authorizations; (b) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (c) access to assets is permitted only in accordance with management's
general or specific authorization; and (d) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
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Section 3.23 Ability to Meet Obligations. Neither the Company nor any of its
Subsidiaries intends to, nor does it believe that it will, incur debts beyond
its ability to pay such debts as they mature, assuming the ability of the
Company to refinance such debts. The present fair saleable value of the assets
of each of the Company and its Subsidiaries exceeds the amount that it will be
required to be paid on or in respect of its existing debts and other
liabilities (including contingent liabilities) as they become absolute and
matured. The assets of each of the Company and its Subsidiaries do not
constitute unreasonably small capital to carry out its business as conducted
or as proposed to be conducted.
Section 3.24 Relationships with Related Persons. Except as disclosed in the
SEC Documents filed with the SEC prior to the date hereof and except for this
Agreement, the Stockholders' Agreement, the transactions contemplated hereby
and thereby matters relating to the provision of benefits of employees of the
Company or its Subsidiaries, there are no, and since December 31, 1998 have
not been any, undischarged contracts or agreements or other material
transactions between the Company or any of its Subsidiaries, on the one hand,
and any director or executive officer of the Company or any of their
respective Related Persons (as defined below), on the other hand, and no
director or executive officer of the Company or any of their respective
Related Persons have any interest in any of the assets of the Company or any
of its subsidiaries. No executive officer, director of the Company or any of
their respective Related Persons has any claim, charge, action or cause of
action against the Company or any of its Subsidiaries, except for claims for
accrued vacation pay, accrued benefits under the Company benefit plans, claims
for compensation, expense reimbursement and similar obligations and similar
matters and agreements. For purposes hereof, the term "Related Persons" shall
mean (a) each other member of such individual's Family and (b) any Person or
entity that is directly or indirectly controlled by any one or more members of
such individual's Family. For purposes of this definition, the "Family" of an
individual includes (a) such individual, (b) the individual's spouse,
siblings, or ancestors, (c) any lineal descendent of such individual, or their
siblings, or ancestors, or (d) a trust for the benefit of any of the
foregoing.
Section 3.25 Restrictions on Business Activities. Except as set forth in the
SEC Documents and except for the financial covenants in the Credit Agreements,
there is no Contractual Obligation or Order binding upon the Company or its
Subsidiaries or their properties which has or could reasonably be expected to
have the effect of prohibiting or materially impairing any material
acquisition of property by the Company or any of its Subsidiaries or the
conduct of the business by the Company or any of its Subsidiaries.
Section 3.26 Certain Business Practices. None of the Company, any of its
Subsidiaries or, to the Knowledge of the Company, any director, officer,
employee or agent of the Company or any of its Subsidiaries had, in
furtherance of any business of the Company: (1) used any funds for unlawful
contributions, gifts, entertainment or other unlawful payments or expenses
relating to political activity; (2) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee or to any
foreign or domestic political party or campaign; (3) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (4) made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
Section 3.27 Disclosure. No representation or warranty of Company contained
in this Agreement, and no statement contained in any document or certificate
furnished or to be furnished by or on behalf of the Company to Purchaser or
any of its representatives pursuant to this Agreement, contains or, as of the
First Closing Date or the Second Closing Date, will contain, any untrue
statement of a material fact, or omits or, as of the First Closing Date or the
Second Closing Date, will omit to state any material fact necessary, in light
of the circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading or necessary in order to fully and
fairly provide the information required to be provided in any such document or
certificate.
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ARTICLE IV.
Representations and Warranties of the Purchasers
Each Purchaser represents and warrants to the Company as follows:
Section 4.1 Organization, Standing and Power. It is an entity duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization and has all requisite power and authority to
own, lease, and operate its properties and to carry on its business as now
being conducted and to execute and deliver this Agreement and the
Stockholders' Agreement and consummate the transactions contemplated hereby
and thereby.
Section 4.2 Authority; Approvals.
(a) (1) The execution and delivery of this Agreement and the Stockholders'
Agreement and the purchase of the Shares to be purchased by it have been duly
and properly authorized; (2) this Agreement has been, and the Stockholders'
Agreement when executed and delivered will be, duly executed and delivered by
such Purchaser and constitutes, or will constitute, the legal, valid and
binding obligation of such Purchaser enforceable against such Purchaser in
accordance with its terms; (3) the purchase of the Shares to be purchased by
it does not conflict with or violate (A) its organizational documents or (B)
assuming the approvals referred to in Section 4.2(b) are duly and timely made
or obtained, any Applicable Law in a manner that could reasonable be expected
to materially hinder or impair the completion of any of the transactions
contemplated hereby; and (4) the purchase of Shares to be purchased by it does
not impose any penalty or other onerous condition on such Purchaser that could
reasonably be expected to materially hinder or impact the completion of any of
the transactions contemplated hereby.
(b) No Approval of any Governmental Entity or any other Person in respect of
any Requirement of Law, Contractual Obligation or otherwise, and no lapse of a
waiting period under a Requirement of Law, is necessary or required in
connection with the execution, delivery or performance by such Purchaser, or
enforcement against such Purchaser, of this Agreement or the transactions
contemplated thereby, except for the filing of a notification report by such
Purchaser under the HSR Act and the expiration or termination of the
applicable waiting period with respect thereto.
Section 4.3 Investment Intent. The Shares to be acquired by it hereunder are
being acquired for its own account for investment and with no intention of
distributing or reselling such Shares or any part thereof or interest therein
in any transaction which would be in violation of the securities laws of the
United States of America or any applicable state or any foreign country or
jurisdiction.
Section 4.4 Purchaser Inquiry. Such Purchaser and its advisors have reviewed
the business, management and financial information made available by or on
behalf of the Company as part of their "due diligence" exercise and have had
an opportunity to ask questions of, and receive answers from, the Company and
its management and advisors concerning the business, management and financial
affairs of the Company and its Subsidiaries, which questions, if any, have
been answered, and have had an opportunity to obtain, and have received, any
additional information deemed necessary by them to form a decision concerning
their investment in the Company contemplated herein; provided, however, that
none of the foregoing shall limit, diminish or constitute a waiver of any
representation, warranty or covenant made under this Agreement by the Company.
Section 4.5 Transfer Restrictions. If such Purchaser should decide to
dispose of any of the Shares to be purchased by it, such Purchaser understands
and agrees that it may do so only pursuant to an effective registration
statement under the Securities Act or pursuant to an exemption from
registration under the Securities Act. In connection with any offer, resale,
pledge or other transfer (individually and collectively, a "Transfer") of any
Shares other than pursuant to an effective registration statement, the Company
may require that the transferor of such Shares provide to the Company an
opinion of counsel which opinion shall be reasonably satisfactory in form and
substance to the Company, to the effect that such Transfer is being made
pursuant to an exemption
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from, or in a transaction not subject to, the registration requirements of the
Securities Act and any applicable state or foreign securities laws. Such
Purchaser agrees to the imprinting, so long as appropriate, of substantially
the following legend on certificates representing the Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
The legends set forth above may be removed if and when the Shares
represented by such certificate are disposed of pursuant to an effective
registration statement under the Securities Act or the opinion of counsel
referred to above has been provided to the Company. The Share Certificates
shall also bear any additional legends required by applicable federal, state
or foreign securities laws, which legends may be removed when, in the opinion
of counsel to the Company, the same are no longer required under the
applicable requirements of such securities laws. Such Purchaser agrees that,
in connection with any Transfer of Shares by it pursuant to an effective
registration statement under the Securities Act, it will comply with all
prospectus delivery requirements of the Securities Act. The Company makes no
representation, warranty or agreement as to the availability of any exemption
from registration under the Securities Act with respect to any resale of
Shares.
Section 4.6 Purchaser Status. Such Purchaser represents and warrants to, and
covenants and agrees with the Company that (a) at the time it was offered the
Shares, it was, (b) at the date hereof, it is, and (c) at each of the First
Closing Date and the Second Closing Date, it will be, an accredited investor
as defined in Rule 501(a) under the Securities Act, and has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the Company and an investment in the Shares, and is able
to bear the economic risk of such investment.
Section 4.7 Sufficient Funds. Such Purchaser will have available funds
sufficient to purchase its allocation of the Shares in accordance with the
terms of this Agreement and to perform its obligations hereunder.
Section 4.8 Citizenship. Such Purchaser is "a citizen of the United States"
within the meaning of Section 2 of the Shipping Act of 1916, as amended.
Section 4.9 Brokers or Finders. Other than the Commitment Fee, the Company
has not incurred, and will not incur, directly or indirectly, as a result of
any action taken by the Purchaser any liability for brokerage or finders' fees
or agents' commissions or any similar charges in connection with this
Agreement.
ARTICLE V.
Covenants
Section 5.1 Confidentiality. For a period of three years from the date of
this Agreement, the Purchasers will refrain, and will cause their respective
Representatives to refrain from disclosing to any other Person any
Confidential Information. Disclosure of Confidential Information will not be
deemed to be a breach of this Section 5.1 if such disclosure is made with the
consent of the Company or pursuant to a subpoena or order issued by a court of
competent jurisdiction or by a judicial or administrative or legislative body
or committee; provided that, upon receipt by the Purchasers of any subpoena or
order covering Confidential Information of the Company, the Purchasers will
promptly notify the Company of such subpoena or order. If this Agreement is
terminated, the Purchasers further agree that they will, upon the request of
the Company, promptly deliver to the Company all Confidential Information,
including all copies, reproductions and extracts thereof in their possession
or in the possession of any of their Representatives, and, upon the request of
the Company, the Purchasers and their Representatives will destroy all other
documents or records prepared by the Purchasers or their Representatives that
are based on, derived from or otherwise reflect the Confidential Information.
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Section 5.2 Conduct of Business. The Company hereby covenants and agrees
that, until the earlier of the Second Closing or the termination of this
Agreement, unless otherwise expressly contemplated by this Agreement or
consented to in writing by the Purchasers (such consent not to be unreasonably
withheld):
(a) the Company will and will cause each of its Subsidiaries to (1)
operate its business in the usual and ordinary course consistent with past
practices except as contemplated by this Agreement; (2) use commercially
reasonable efforts to maintain and keep its properties and assets in as
good a repair and condition as at present, ordinary wear and tear excepted;
and (3) use all reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that
currently maintained; and
(b) the Company shall not, and shall not permit any of its Subsidiaries
to:
(1) acquire or agree to acquire (whether pursuant to a definitive
agreement, a non-binding letter of intent or otherwise), by merging or
consolidating with, by purchasing an equity interest in or a portion of
the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof, or otherwise acquire or agree to acquire any assets of any
other Person (other than assets which, individually or in the
aggregate, are not Material to the business or operations of the
Company or any of its Subsidiaries), except for any acquisitions or
agreements to acquire that have previously been disclosed to the
Purchasers;
(2) other than in connection with the Credit Agreements, refinancing
of the debt under the Credit Agreements and financings disclosed in the
SEC Documents, sell, exchange, mortgage, pledge, transfer or otherwise
dispose of, or agree to sell, exchange, mortgage, pledge, transfer or
otherwise dispose of, any of its assets or any assets of any of its
Subsidiaries that are, individually or in the aggregate, Material to
the business or operations of the Company or any of its Subsidiaries;
(3) adopt or propose to adopt any amendments to the Certificate of
Incorporation or Bylaws, or make any Material changes in the Company's
capital structure;
(4) change any of its accounting methods, principles, practices or
policies or make or rescind any express or deemed election relating to
Taxes, settle or compromise any Proceeding relating to Taxes, or change
any of its methods of reporting income or deductions for federal or
other income Tax purposes from those employed in the preparation of the
federal or other income Tax Returns or other Tax Returns for the
taxable year ending December 31, 1997, except as may be required by
Applicable Law or GAAP and except as would not be Material to the
Company or its Subsidiaries;
(5) other than borrowings under or permitted by the Credit Agreements
refinancing of the debt under the Credit Agreements and financings
disclosed in the SEC Documents, incur any obligation for borrowed money
or purchase money indebtedness, whether or not evidenced by a note,
bond, debenture or similar instrument or under any financing lease,
whether pursuant to a sale-and-leaseback transaction or otherwise;
(6) make any loans or advances to any Person, except in the ordinary
course of business;
(7) declare or pay any dividend or make any other distribution
(whether in cash, stock or property) with respect to its capital stock
(or other voting or equity securities or interests, as applicable),
other than dividends paid by any Subsidiary to the Company or another
Subsidiary in the ordinary and usual course of the Company's business;
(8) split, combine, reclassify or amend any term of any of the
Company's shares or capital stock (or other voting or equity securities
or interests, as applicable);
(9) (A) in any Material amount, issue, sell or deliver (whether
through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase, or otherwise) any of its shares of
capital stock or other securities other than (i) as contemplated herein
or (ii) pursuant to awards issued and outstanding as of the date hereof
under outstanding options to purchase Common Stock granted
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under the Company's director and employee stock incentive plans
disclosed in the SEC Documents or as required under the terms of any
other security of the Company outstanding as in effect as of the date
of this Agreement or (B) in any Material amount, purchase or otherwise
acquire any of its shares or capital stock, employee or director stock
options, warrants or other equity securities or debt securities other
than pursuant to the terms thereof as in effect as of the date of this
Agreement; or
(10) agree in writing or otherwise to do any of the foregoing.
Section 5.3 Approvals. The Company and the Purchasers each agree to
cooperate and use all commercially reasonable efforts to obtain (and will
promptly prepare all registrations, filings and applications, requests and
notices preliminary to) all Approvals that may be necessary or which may be
reasonably requested by the Company or the Purchasers to consummate the
transactions contemplated by this Agreement and the Stockholders' Agreement.
Section 5.4 HSR Act Notification. To the extent the HSR Act will be
applicable to the acquisition of the Shares by the Purchasers, each of the
parties hereto shall (a) file or cause to be filed, as promptly as practicable
after the execution and delivery of this Agreement, with the Federal Trade
Commission and the United States Department of Justice, all reports and other
documents required to be filed by such party under the HSR Act concerning the
transactions contemplated hereby and (b) promptly comply with or cause to be
complied with any requests by the Federal Trade Commission or the United
States Department of Justice for additional information concerning the
transactions contemplated hereby, in each case so that the waiting period
applicable to this Agreement and the transactions contemplated hereby under
the HSR Act shall expire as soon as practicable after the execution and
delivery of this Agreement. Each party hereto agrees to request, and to
cooperate with the other party or parties in requesting, early termination of
any applicable waiting period under the HSR Act. If after the First Closing
and until the Second Closing, further filings are required under the HSR Act
so that the Purchasers may acquire the Second Tranche, the Company will upon
the written request of a Purchaser, and the Purchasers will upon the written
request of the Company, (a) file or cause to be filed, as promptly as
practicable after the receipt of such notice and in no event later than
fifteen Business Days after the receipt of such notice with the Federal Trade
Commission and the United States Department of Justice, all reports and other
documents required to be filed by such party under the HSR Act concerning the
transactions contemplated in such notice; (b) promptly comply with or cause to
be complied with any requests by the Federal Trade Commission or the United
States Department of Justice for additional information so that the waiting
period applicable thereto under the HSR Act shall expire as soon as
practicable; and (c) cooperate with the other parties in requesting, early
termination of any applicable waiting period under the HSR Act. The Company
will reimburse the Purchasers for any filing fees in connection with the first
such filings by the Purchasers.
Section 5.5 Notification of Certain Matters. The Company shall give prompt
notice to the Purchasers, and the Purchasers shall give prompt notice to the
Company, of (a) the occurrence, or failure to occur, of any event that causes
any representation or warranty contained in any Transaction Document to be
untrue or inaccurate in any material respect at any time from the date of this
Agreement to the Second Closing and (b) any failure of the Company or the
Purchasers to comply with or satisfy, in any material respect, any covenant,
condition or agreement to be complied with or satisfied by it under any
Transaction Document. The provisions of this Section 5.5 shall survive for so
long as any representation, warranty, covenant, or agreement shall survive
hereunder.
Section 5.6 Directors. The Company shall take, or cause to be taken, such
action as may be necessary or advisable to ensure that simultaneously with the
First Closing the Board of Directors shall consist of eight directorships, six
of which shall be held by Company's existing directors and two of which shall
be designees of Inverness/Phoenix Capital LLC pursuant to the Stockholders'
Agreement.
Section 5.7 Indemnification of Directors.
(a) At the First Closing, the Company shall enter into indemnification
agreements with each of the directors designated by the Purchasers.
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(b) The Company currently maintains a directors' and officers' liability
insurance policy providing an aggregate of $10.0 million in coverage. The
Company shall use all commercially reasonable efforts to ensure that, as of
the date of their appointment, the directors and officers liability policy
provide coverage for the Purchasers' designees in their capacity as directors
of the Company on the same basis as the existing directors of the Company.
Section 5.8 Listing. Prior to each of the First Closing and the Second
Closing, the Company shall file an additional listing application with the
Nasdaq National Market with respect to the shares of Common Stock constituting
the First Tranche and Second Tranche, respectively, and shall use reasonable
best efforts to obtain the approval of the Nasdaq National Market to the
listing of such Shares of Common Stock.
Section 5.9 Stockholders' Meeting; Proxy Statement.
(a) The Company shall take all action necessary in accordance with
Applicable Law and the Certificate of Incorporation and Bylaws to duly call,
give notice of, convene and hold its 1999 annual meeting of stockholders (the
"Meeting") as promptly as practicable after the date hereof, but in all cases
prior to July 15, 1999, to consider and vote upon the approval and adoption
under the rules of the Nasdaq National Market of the issuance of the shares of
Common Stock constituting the Second Tranche. The Company, through its
officers and the Board, shall (1) unanimously recommend to the stockholders of
the Company that they vote in favor of the adoption and approval of the
issuance of shares of Common Stock constituting the Second Tranche; (2) use
commercially reasonable efforts to solicit from the stockholders of the
Company proxies in favor of such adoption and approval; and (3) take all other
commercially reasonable efforts to secure a vote of the stockholders of the
Company in favor of such adoption and approval; provided, however, that
neither the Board nor any committee thereof shall withdraw or modify, or
propose to withdraw or modify, in any manner adverse to the Purchasers the
approval or recommendation by the Board or any such committee thereof of the
issuance of the shares of Common Stock constituting the Second Tranche or take
any action having such effect.
(b) As promptly as practicable after the date hereof, the Company shall
prepare, and file with the Commission under the Exchange Act, shall use
commercially reasonable efforts to have cleared by the Commission, and
promptly thereafter shall mail to its stockholders, a proxy statement with
respect to the Meeting. The proxy statement shall contain the unanimous
recommendation of the Board that the stockholders of the Company vote in favor
of the adoption and approval of the issuance of the shares of Common Stock
constituting the Second Tranche. The Company shall vote all management proxies
in favor of such adoption and approval, except for such proxies that
specifically indicate to the contrary. The Company shall notify the Purchasers
promptly of the receipt of any comments on, or any requests for amendments or
supplements to, the proxy statement by the Commission, and the Company shall
supply the Purchasers with copies of all correspondence between it and its
representatives, on the one hand, and the Commission or members of its staff,
on the other, with respect to the proxy statement. The Company, after
consultation with the Purchasers, shall use commercially reasonable efforts to
respond promptly to any comments made by the Commission with respect to the
proxy statement. The Company and the Purchasers shall cooperate with each
other in preparing the proxy statement, and the Company and the Purchasers
shall each use commercially reasonable efforts to obtain and furnish the
information required to be included in the proxy statement. Each of the
Company and the Purchasers agrees promptly to correct any information provided
by it for use in the proxy statement if and to the extent that such
information shall have become false or misleading in any material respect, and
the Company further agrees to take all steps necessary to cause the proxy
statement as so corrected to be filed with the SEC and to be disseminated
promptly to holders of shares of the Common Stock, in each case as and to the
extent required by Applicable Law.
Section 5.10 Rights Plan Amendment. The Company shall take all action
necessary to cause the Rights Agreement dated as of February 19, 1998 by and
between the Company and ChaseMellon Shareholder Services, L.L.C. as Rights
Agent (as amended, the "Trico Rights Agreement"), to be amended prior to the
First Closing Date so that the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby shall not cause the
rights issued pursuant to the Trico Rights Agreement to become exercisable
under the Trico Rights Agreement.
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Section 5.11 Use of Proceeds. The Company shall use the proceeds from the
sale of the Shares for working capital and general corporate purposes.
ARTICLE VI.
Conditions Precedent to Closing
Section 6.1 Conditions Precedent to Each Party's Obligation. The respective
obligations of the Purchasers and the Company to effect the transactions
contemplated hereby are subject to the satisfaction on or prior to (1) the
First Closing Date, in the case of the First Closing, or (2) the Second
Closing Date, in the case of the Second Closing, of the following conditions:
(a) Approvals. All Approvals of, or expirations of waiting periods imposed
by, any Governmental Entity necessary for the consummation of the transactions
contemplated by this Agreement shall have been filed, occurred, or been
obtained, as applicable, including the expiration or termination of any
applicable waiting period under the HSR Act, and including, in the case of the
Second Closing, the approval contemplated in Section 5.9 hereof.
(b) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction, or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated hereby shall be in effect.
(c) No Action. No action shall have been taken nor any statute, rule, or
regulation shall have been enacted by any Governmental Entity that makes the
consummation of the transactions contemplated hereby illegal.
Section 6.2 Conditions Precedent to Obligation of the Purchasers. The
obligation of the Purchasers to effect the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions unless
waived, in whole or in part, by the Purchasers:
(a) Representations and Warranties. The representations and warranties of
the Company set forth in this Agreement shall be true and correct in all
respects (provided that, for purposes of this Section 6.2(a), any
representation or warranty of the Company contained herein that is qualified
by a materiality standard or a Material Adverse Effect qualification shall be
read without regard to any such qualifications as if such qualifications were
not contained therein) as of the date of this Agreement and as of the First
Closing Date and as of the Second Closing Date as though made on and as of the
First Closing Date and the Second Closing Date, respectively, except for such
failures which, individually or in the aggregate, have not had and could not
reasonably be expected to have a Material Adverse Effect, and the Purchasers
shall have received a certificate to the foregoing effect signed on behalf of
the Company and its Subsidiaries by the chief executive officer or by the
chief financial officer of the Company at each of the First Closing and the
Second Closing, if any.
(b) Performance of Obligations. The Company and its subsidiaries shall have
performed in all material respects all obligations required to be performed by
it or them under this Agreement prior to the First Closing Date and prior to
the Second Closing Date, if any, and the Purchasers shall have received a
certificate to such effect signed on behalf of the Company and its
Subsidiaries by the chief executive officer or by the chief financial officer
of the Company at each of the First Closing and the Second Closing, if any.
(c) No Adverse Action or Decision. There shall be no action, suit,
investigation or proceeding, pending or threatened, against or affecting the
Company or any of its Subsidiaries or any of their respective properties or
rights, or any of their Affiliates, officers or directors, before any court,
arbitrator or administrative or governmental body which (1) seeks to restrain,
enjoin or prevent the consummation of or otherwise affect the transactions
contemplated by this Agreement or the Stockholders' Agreement or (2) questions
the validity or legality of any such transaction or seeks to recover damages
or to obtain other relief in connection with any such transaction.
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(d) Consents Under Agreements. The Purchasers shall have been furnished with
evidence of all consents or approvals, including, in the case of the Second
Closing, the approval of the Company's stockholders of the issuance of the
shares of Common Stock constituting the Second Tranche, required to be
obtained by the Company or any of its Subsidiaries with respect to the
consummation of each of the transactions contemplated by this Agreement the
failure of which to obtain reasonably could be expected to result in a
Material Adverse Effect, and each such consent or approval shall be
unconditional.
(e) Legal Opinions. The Purchasers shall have received from Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., counsel to the Company and its
Subsidiaries, or other counsel to the Company and its Subsidiaries reasonably
acceptable to the Purchasers an opinion dated the First Closing Date, with
respect to the First Closing, and the Second Closing Date, with respect to the
Second Closing, in form and substance reasonably acceptable to the Purchasers.
(f) Appointment to the Board. The Board shall have appointed the designees
of Inverness/Phoenix Capital LLC to the Board in accordance with Section 5.6
and the Purchasers shall have received a copy of the resolutions of the Board
pursuant to which such appointments were made.
(g) Closing Deliveries. All documents, instruments, certificates or other
items required to be delivered by the Company pursuant to Section 7.2(b) or
Section 7.4(b), as the case may be, shall have been delivered.
Section 6.3 Conditions Precedent to Obligations of the Company. The
obligation of the Company to effect the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions unless
waived, in whole or in part, by the Company:
(a) Representations and Warranties. The representations and warranties of
the Purchasers set forth in this Agreement shall be true and correct in all
respects (provided that, for purposes of this Section 6.3(a), any
representation or warranty of the Purchasers contained herein that is
qualified by a materiality standard or a Material Adverse Effect qualification
shall be read without regard to any such qualifications as if such
qualifications were not contained therein) as of the date of this Agreement
and as of the First Closing Date and as of the Second Closing Date as though
made on and as of the First Closing Date and the Second Closing Date,
respectively, except for such failures which, individually or in the
aggregate, have not had and could not reasonably be expected to have a
Material Adverse Effect, and the Company shall have received a certificate to
the foregoing effect signed on behalf of the Purchasers by its managing member
at each of the First Closing and the Second Closing, if any.
(b) Performance of Obligations of the Purchasers. The Purchasers shall have
performed in all material respects the obligations required to be performed by
them under this Agreement prior to the First Closing Date and prior to the
Second Closing Date, if any, and the Company shall have received a certificate
to such effect signed on behalf of the Purchasers by its managing member at
each of the First Closing and the Second Closing, if any.
(c) Closing Deliveries. All documents, instruments, certificates or other
items required to be delivered by the Purchasers pursuant to Section 7.2(a) or
Section 7.4(a) shall have been delivered.
ARTICLE VII.
Closings
Section 7.1 First Closing. Subject to the satisfaction or waiver of the
conditions set forth in Article VI, the purchase and sale of the First Tranche
to be purchased by the Purchasers hereunder (the "First Closing") will take
place at the offices of Vinson & Elkins L.L.P., 2300 First City Tower, 1001
Fannin, Houston, Texas, 77002, at 10:00 a.m., local time, on the third
Business Day following the satisfaction or waiver (subject to Applicable Law)
of each of the conditions to the obligations of the parties to effect the
transactions to occur at
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such First Closing as set forth in Article VI, or on such other date as
mutually agreed to by the parties hereto. The date on which the First Closing
occurs is herein referred to as the "First Closing Date". All closing
transactions at the First Closing shall be deemed to have occurred
simultaneously.
Section 7.2 Actions to Occur at the First Closing.
(a) At the First Closing, the Purchasers shall deliver to the Company the
following:
(1) Purchase Price. An amount equal to the First Tranche Purchase Price
for the First Tranche in accordance with Article II.
(2) Certificates. The certificates described in Sections 6.3(a) and
6.3(b).
(3) Stockholders' Agreement. The Stockholders' Agreement, duly executed
by the Purchasers.
(b) At the First Closing, the Company shall deliver to the Purchasers (or to
their respective designees as indicated otherwise) the following:
(1) Share Certificates. Certificates representing the shares of Common
Stock constituting the First Tranche.
(2) Commitment Fee. Cash in the amount of $1,000,000, constituting
partial payment of the Commitment Fee in accordance with Article II.
(3) Stockholders' Agreement. The Stockholders' Agreement, duly executed.
(4) Certificates. The certificates described in Sections 6.2(a) and
6.2(b).
(5) Consents Under Agreements. The original of each consent or approval,
if any, pursuant to Section 6.2(d).
(6) Legal Opinions. The opinions of counsel referred to in Section
6.2(e).
(7) Appointment to the Board. The resolutions of the Board referred to in
Section 6.2(f).
Section 7.3 Second Closing. Subject to the satisfaction or waiver of the
conditions set forth in Article VI, the purchase and sale of the Second
Tranche to be purchased by the Purchasers hereunder (the "Second Closing")
will take place at the offices of Vinson & Elkins L.L.P., 2300 First City
Towers, 1001 Fannin, Houston, Texas, 77002, at 10:00 a.m., local time, on the
third Business Day following the satisfaction or waiver (subject to Applicable
Law) of each of the conditions to the obligations of the parties to effect the
transactions to occur at such Second Closing as set forth in Article VI, or on
such other date as mutually agreed to by the parties hereto. The date on which
the Second Closing occurs is herein referred to as the "Second Closing Date".
All closing transactions at the Second Closing shall be deemed to have
occurred simultaneously.
Section 7.4 Actions to Occur at the Second Closing.
(a) At the Second Closing, the Purchasers shall deliver to the Company the
following:
(1) Purchase Price. An amount equal to the Second Tranche Purchase Price
for the Second Tranche in accordance with Article II.
(2) Certificates. The certificates described in Sections 6.3(a) and
6.3(b).
(b) At the Second Closing, the Company shall deliver to the Purchasers (or
to their respective designees as indicated otherwise) the following:
(1) Share Certificates. Certificates representing the shares of Common
Stock constituting the Second Tranche.
(2) Commitment Fee. Cash in the amount of $1,000,000, constituting
payment of the remainder of the Commitment Fee in accordance with Article
II if the Second Closing occurs on or before July 15, 1999.
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(3) Certificates. The certificates described in Sections 6.2(a) and
6.2(b).
(4) Consents Under Agreements. The original of each consent or approval,
if any, pursuant to Section 6.2(d), including a certificate from the
Company with respect to the approval of the Company's stockholders of the
issuance of the shares of Common Stock constituting the Second Tranche.
(5) Legal Opinions. The opinions of counsel referred to in Section
6.2(e).
ARTICLE VIII.
Termination
Section 8.1 Termination. This Agreement may be terminated prior to the First
Closing:
(a) by mutual consent of the Purchasers and the Company;
(b) by either the Purchasers or the Company:
(1) in the event of a breach by the other party of any representation,
warranty, covenant or agreement contained in this Agreement which (A) would
give rise to the failure of a condition set forth in Section 6.2 or 6.3,
and (B) cannot be cured or, if curable, has not been cured within 20 days
(the "Cure Period") following receipt by the breaching party of written
notice of such breach;
(2) if a court of competent jurisdiction or other Governmental Entity
shall have issued an order, decree, or ruling or taken any other action
(which order, decree, or ruling the Purchasers and the Company shall use
all commercially reasonable efforts to lift), in each case permanently
restraining, enjoining, or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling, or other
action shall have become final and nonappealable; provided, however, that
the right to terminate this Agreement under this clause (2) shall not be
available to any party whose breach of this Agreement has been the cause
of, or resulted in, such order, decree, ruling or other action; or
(3) if the First Closing shall not have occurred by May 15, 1999,
provided, however, that the right to terminate this Agreement under this
clause (3) shall not be available to any party whose breach of this
Agreement has been the cause of, or resulted in, the failure of the First
Closing to occur on or before such date.
Unless agreed to otherwise in writing by the Purchasers and the Company,
this Agreement shall automatically terminate on September 30, 1999 if the
stockholder approval contemplated in Section 5.9 has not been obtained.
The right of any party hereto to terminate this Agreement pursuant to this
Section 8.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers, directors,
employees, accountants, consultants, legal counsel, agents, or other
representatives whether prior to or after the execution of this Agreement.
Section 8.2 Effect of Termination. In the event of the termination of this
Agreement, written notice thereof shall forthwith be given to the other party
specifying the provision hereof pursuant to which such termination is made,
unless such termination has occurred due to the lapse of time, and, except in
the case of a termination pursuant to Section 8.1(b)(1), this Agreement
(except for the provisions of this Section 8.2, and Sections 5.1, 10.5, 10.6,
10.9, 10.10, 10.11, 10.12, and 10.13, which shall survive such termination)
shall forthwith become null and void. Subject to the provisions of Section
10.5, in the event of a termination of this Agreement by either the Company or
the Purchasers as provided above, other than a termination pursuant to Section
8.1(b)(1), there shall be no liability on the part of the Company or the
Purchasers; provided, however, that nothing in this Section 8 shall be deemed
to release either party from any breach by such party of the terms and
provisions of this Agreement or to impair the right of either party to compel
specific performance by the other party of its obligations under this
Agreement.
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<PAGE>
ARTICLE IX.
Recovery of Fees
Any Party who shall obtain a final judgment in a court of competent
jurisdiction for the payment of damages by another Party for a breach of this
Agreement shall be entitled to recover reasonable attorneys' fees and court
costs incurred in connection with the obtaining of such judgment.
ARTICLE X.
Miscellaneous
Section 10.1 Survival of Provisions.
(a) The representations and warranties of the Company and the Purchasers
made herein or in the Stockholders' Agreement and the covenants of the Company
and the Purchasers to be complied with on or prior to the First Closing Date,
the Second Closing Date or September 30, 1999, as the case may be, shall
remain operative and in full force and effect pursuant to their terms,
regardless of (1) any investigation made by or on behalf of the Purchasers or
the Company, as the case may be, or (2) acceptance of any of the Shares and
payment by the Purchasers therefor, until April 16, 2002; provided, however,
that the representations and warranties of the Company made in Sections 3.1,
3.3 and 3.4 shall not terminate.
Section 10.2 No Waiver; Modification in Writing. No failure or delay on the
part of the Company or a Purchaser in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. Without
limiting the rights that any party may have for fraud under common law, and
except with respect to claims arising from or liability based on a breach of
the Company's representation and warranty in Section 3.5(a), the remedies
provided for herein are cumulative and are the exclusive remedies available to
the Company or the Purchasers at law or in equity. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given without the written consent of the Company,
on the one hand, and the Purchasers or their permitted assigns, on the other
hand; provided that notice of any such waiver shall be given to each party
hereto as set forth below. Any amendment, supplement or modification of or to
any provision of this Agreement, or any waiver of any provision of this
Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement, no notice to or demand on any party hereto in any
case shall entitle the other party to any other or further notice or demand in
similar or other circumstances.
Section 10.3 Specific Performance. The parties recognize that in the event
the Company or the Purchasers should refuse to perform under the provisions of
this Agreement, monetary damages alone will not be adequate. The Purchasers or
the Company, as the case may be, shall therefore be entitled, in addition to
any other remedies which may be available, including money damages, to obtain
specific performance of the terms of this Agreement, without any requirement
for the posting of any bond. In the event of any action to enforce this
Agreement or the Stockholders' Agreement specifically, the Company and the
Purchasers hereby waive the defense that there is an adequate remedy at law.
Section 10.4 Severability. If any term or other provision of this Agreement
is invalid, illegal, or incapable of being enforced by any rule of applicable
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated herein are not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal, or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated herein
are consummated as originally contemplated to the fullest extent possible.
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<PAGE>
Section 10.5 Fees and Expenses.
(a) The Company shall pay its own expenses incurred in connection with the
negotiation, execution, delivery, performance and consummation of this
Agreement.
(b) Unless this Agreement is terminated by the Company pursuant to Section
8.1(b)(1), within 30 days after the earlier of (1) the Second Closing Date or
(2) July 15, 1999 the Company shall reimburse each of the Purchasers for the
out-of-pocket expenses of the Purchasers or any of their Affiliates (whether
or not incurred prior to the date hereof), including, without limitation, the
fees, disbursements and other reasonable expenses of attorneys, accountants
and any other advisors thereto, arising out of or relating to the negotiation,
execution, delivery and consummation of this Agreement.
Section 10.6 Parties in Interest. This Agreement shall be binding upon and,
except as provided below, inure solely to the benefit of each party hereto and
their successors and assigns, and nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
Section 10.7 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
(a) If to the Purchasers, to:
Inverness/Phoenix Capital LLC
660 Steamboat Road
Greenwich, Connecticut 06830
Attn: W. McComb Dunwoody
James C. Comis III
(b) If to the Company, to:
Trico Marine Services, Inc.
2401 Fountain View, Suite 920
Houston, Texas 77057
Attn: Chairman
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, on the date of receipt, if telecopied, three Business Days
after the date of mailing, if mailed by registered or certified mail, return
receipt requested, and one Business Day after the date of sending, if sent by
Federal Express or other recognized overnight courier.
Section 10.8 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, all of
which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 10.9 Entire Agreement. This Agreement (which term shall be deemed to
include the Exhibits and Schedules hereto and the other certificates,
documents and instruments delivered hereunder) and the Stockholders' Agreement
constitute the entire agreement of the parties hereto and supersede all prior
agreements, letters of intent and understandings, both written and oral, among
the parties with respect to the subject matter hereof. There are no
representations or warranties, agreements, or covenants other than those
expressly set forth in this Agreement and the Stockholders Agreement.
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<PAGE>
Section 10.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CONFLICTS OF LAW PROVISIONS.
Section 10.11 Public Announcements. The Company, on the one hand, and the
Purchasers, on the other, shall consult with each other before issuing any
press release or otherwise making any public statements with respect to this
Agreement or the transactions contemplated hereby, except for statements
required by Applicable Law or by any listing agreements with or rules of any
national securities exchange or the National Association of Shares Dealers,
Inc., or made in disclosures reasonably determined as required to be filed
pursuant to the Securities Act or the Exchange Act.
Section 10.12 Assignment. Neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by any of the parties
hereto, whether by operation of law or otherwise; provided, however, that upon
notice to the Company, (a) each Purchaser may assign or delegate any or all of
its rights or obligations under this Agreement to any Affiliate or Partner
thereof and (b) nothing in this Agreement shall limit each Purchaser's ability
to assign its rights under this Agreement to any institutional investor that
provides funds to the Purchasers without the consent of the Company. In the
event of such an assignment, the provisions of this Agreement shall inure to
the benefit of and be binding on the Purchaser's assigns. Any attempted
assignment in violation of this Section 10.12 shall be null and void.
Section 10.13 Director and Officer Liability. The directors, officers,
partners, members and stockholders of the Purchasers, the Company and their
respective Affiliates shall not have any personal liability or obligation
arising under this Agreement (including any claims that the Company or the
Purchasers may assert) other than as an assignee of this Agreement.
Section 10.14 Headings. The headings of this Agreement are for convenience
of reference only and are not part of the substance of this Agreement.
[The remainder of this page is intentionally left blank.]
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first written above.
TRICO MARINE SERVICES, INC.
By: __________________________________________
Name: Victor M. Perez
Title: Vice President and Chief Financial
Officer
INVERNESS/PHOENIX PARTNERS LP
By: Inverness/Phoenix Capital LLC,
its General Partner
By: Inverness Management Fund I LLC,
its Managing Member
By: Key-Comis Limited Partnership,
its Managing Member
By: J.C. Comis LLC,
its General Partner
By: ___________________________
Name: James C. Comis, III
Title: Managing Member
EXECUTIVE CAPITAL PARTNERS I LP
By: Inverness/Phoenix Capital LLC,
its General Partner
By: Inverness Management Fund I LLC,
its Managing Member
By: Key-Comis Limited Partnership,
its Managing Member
By: J.C. Comis LLC,
its General Partner
By: ___________________________
Name: James C. Comis, III
Title: Managing Member
A-24
<PAGE>
Exhibit 2.1
Allocation of Purchase Price
<TABLE>
<CAPTION>
First
Purchaser Tranche Second Tranche
- --------- ----------- --------------
<S> <C> <C>
Inverness/Phoenix Partners LP........................ $24,165,866 $24,165,866
Executive Capital Partners I LP...................... 834,134 834,134
=========== ===========
TOTAL.............................................. $25,000,000 $25,000,000
</TABLE>
<PAGE>
Annex B
STOCKHOLDERS' AGREEMENT
Among
Trico Marine Services, Inc.
and
The Purchasers specified herein
May 6, 1999
<PAGE>
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (this "Agreement") is entered into this 6th day
of May 1999, is by and among Trico Marine Services, Inc., a Delaware
corporation ("Trico"), and the Persons specified under the caption
"Purchasers" on the signature page hereof (each, a "Purchaser," and together,
the "Purchasers").
W I T N E S S E T H
WHEREAS, pursuant to that certain Purchase Agreement (the "Purchase
Agreement") dated April 16, 1999 entered into by and among, inter alia,
Inverness/Phoenix Partners LP and Executive Capital Partners I LP (together,
the "Initial Purchasers") and Trico, the Purchasers acquired certain Trico
Securities; and
WHEREAS, the parties hereto desire to set forth certain additional
agreements among them relating to the acquisition and ownership of Trico
Securities by the Purchaser Group; and
WHEREAS, the parties hereto desire to set forth certain additional
agreements among them relating to the Registrable Securities owned by the
Purchaser Group.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties hereto agree as follows:
ARTICLE 1
Defined Terms
Section 1.1 Defined Terms. The following capitalized terms when used in
this Agreement shall have the following meanings:
"Affiliate" or "Associate" shall have the respective meanings assigned
thereto in Rule 405 as presently promulgated under the Securities Act.
"beneficial ownership" and "group" shall have the respective meanings
assigned thereto in Rules 13d-3 and 13d-5 as presently promulgated under the
Exchange Act.
"Board" means the Board of Directors of Trico.
"Common Stock" means the common stock, par value $.01 per share, of Trico.
"Demand Registration" means a demand registration as defined in Section
5.1(a) hereof.
"Director" means any member of the Board.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holders" means the holders of the Registrable Securities in accordance with
the terms of this Agreement.
"Participating Purchasers" means, with respect to any Registration
Statement, the members of the Purchaser Group that include, or have agreed to
include, as the context requires, shares for registration pursuant to such
Registration Statement.
"Partner" means, with respect to any Purchaser, any limited partner or
general partner of such Purchaser or any of such Purchaser's Affiliates,
whether or not such limited partner or general partner is an Affiliate of such
Purchaser.
B-1
<PAGE>
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture or other entity of whatever nature.
"Piggyback Registration" means a piggyback registration as defined in
Section 5.3 hereof.
"Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act),
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Purchaser Group" shall mean the members of the group comprised by
Purchasers, their Affiliates and their Partners.
"Purchaser Representative" shall mean Inverness/Phoenix Capital LLC, or such
other Affiliate of the Initial Purchasers as it, in its sole discretion, may
designate.
"Registrable Securities" means (a) all Trico Securities issued to the
Purchasers pursuant to the Purchase Agreement and (b) any other securities
issued after the date hereof with respect to such Trico Securities by means of
exchange, reclassification, dividend, distribution, split up, combination,
subdivision, recapitalization, merger, spin-off, reorganization or otherwise;
provided, however, that as to any Registrable Securities, such securities
shall cease to constitute Registrable Securities for the purposes of this
Agreement if and when: (1) a Registration Statement with respect to the sale
of such securities shall have been declared effective by the SEC and such
securities shall have been sold pursuant thereto; (2) such securities shall
have been sold in compliance with of all applicable resale provisions of Rule
144 under the Securities Act; (3) as expressed in an opinion of counsel
delivered to and satisfactory to Trico and the transfer agent for the Common
Stock, such securities no longer constitute "restricted securities" within the
meaning of Rule 144 or any successor provision under the Securities Act and
the transfer of such securities does not require registration under the
Securities Act; or (4) such securities cease to be issued and outstanding for
any reason.
"Registration Statement" means any registration statement filed by Trico or
its successor that covers any of the Registrable Shares pursuant to the
provisions of this Agreement, including the Prospectus included therein,
amendments and supplements to such registration statement, including post-
effective amendments, all exhibits, and all material incorporated by reference
or deemed to be incorporated by reference in such registration statement.
"SEC" means the Securities and Exchange Commission, or any successor agency
thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration" means the shelf registration as defined in Section 5.2
hereof.
"Suspension Period" means a period of time (a) commencing on the date on
which Trico provides notice that the Registration Statement for the Shelf
Registration is no longer effective, the Prospectus included therein no longer
complies with the requirements prescribed by Section 10(a) of the Securities
Act or the occurrence of any event requiring the preparation of a supplement
or amendment to the Prospectus included so that, as thereafter delivered to
the purchasers of such Registrable Securities, such Prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and (b) ending on the date when each Purchaser either receives
copies of the supplemented or amended Prospectus contemplated by subparagraph
(a) above or otherwise is advised in writing by the Company that the use of
the Prospectus may be resumed.
B-2
<PAGE>
"Termination Date" means May 6, 2009.
"Trico Securities" means, collectively, the Common Stock and any class or
series of Trico's preferred stock, and any other securities, warrants or
options or rights of any nature (whether or not issued by Trico) that are
convertible into, exchangeable for, or exercisable for the purchase of, or
otherwise give the holder thereof any rights in respect of Common Stock, or
any class or series of Trico preferred stock that is entitled to vote
generally for the election of directors or otherwise.
"Trico Rights Agreement" means the Rights Agreement dated as of February 19,
1998 by and between the Company and ChaseMellon Shareholder Services, L.L.C.
as Rights Agent, as amended.
"Voting Power" means, at, any measurement date, the total number of votes
that could have been cast in an election of directors of Trico had a meeting
of the stockholders of Trico been duly held based upon a record date as of the
measurement date if all Trico Securities then outstanding and entitled to vote
at such meeting were present and voted to the fullest extent possible at such
meeting.
Section 1.2 Other Definitional Provisions. The words "hereof" "herein" and
"hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and section references are to this Agreement unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE 2
Board of Directors; Voting
Section 2.1 Board of Directors.
(a) From and after the date hereof, the Purchaser Representative shall have
the right to designate:
(1) two (2) Directors, so long as the Purchaser Group owns an aggregate
of at least 4,000,000 shares of Common Stock, one of which Directors (the
"2001 Director") will initially be a member of the class of Directors whose
terms expire at the annual meeting of Trico's stockholders in 2001;
provided that, notwithstanding anything contained in this Section
2.1(a)(1), if the Initial Purchasers do not consummate the purchase of the
shares of Common Stock constituting the Second Tranche (as defined in the
Purchase Agreement), upon the expiration of the term of the 2001 Director,
the number of Directors that the Purchaser Representative shall be entitled
to designate shall be reduced to one (1) Director and Trico shall be
relieved of the obligation in Section 2.2 hereof with respect to the
vacancy on the Board created by the expiration of term of the 2001
Director;
(2) one (1) Director, (A) so long as the Purchaser Group owns an
aggregate of less than 4,000,000 shares of Common Stock but more than
500,000 shares of Common Stock and (B) notwithstanding anything contained
in this Section 2.1(a)(2), after the expiration of the term of the 2001
Director, if the Initial Purchasers do not consummate the purchase of the
shares of Common Stock constituting the Second Tranche; and
(3) no Directors, if the Purchaser Group ceases to hold, in the
aggregate, at least 500,000 shares of Common Stock. At such time as the
Purchaser Group ceases to hold, in the aggregate, at least 500,000 shares
of Common Stock, the Purchaser Representative shall cause all of their
Director designees to immediately resign.
(b) The Board on the date hereof shall (1) increase the number of Directors
by enlarging the size of the Board to eight, and (2) name the Persons
designated by the Purchaser Representative to fill the vacancies on the Board
that are created hereby.
B-3
<PAGE>
(c) In the event that any vacancy occurs on the Board because of the death,
disability, resignation, retirement or removal of any Director designated by
the Purchaser Representative, the Purchaser Representative shall designate an
individual to fill such vacancy, with such appointee to serve for the
remainder of the term of the Director whose death, disability, resignation,
retirement or removal caused such vacancy.
Section 2.2 Trico Actions. Trico hereby agrees to take all necessary or
appropriate action to assist in the nomination for election as Directors the
person or persons designated by the Purchaser Representative pursuant to the
provisions of Section 2.1. Trico shall vote all management proxies in favor of
such nominees, except for such proxies that specifically indicate to the
contrary. Trico shall unanimously recommend, through its officers and
Directors, that its stockholders vote in favor of such nominees, and shall use
its reasonable best efforts to solicit from its stockholders proxies voted in
favor of such nominees.
ARTICLE 3
Acquisition and Sale of Trico Securities
Section 3.1. Trico Securities. The Purchasers covenant and agree with Trico
that except for the Trico Securities acquired pursuant to the Purchase
Agreement, the Purchaser Group shall not, without the prior consent of the
Board, directly or indirectly, acquire, become the beneficial owner of or
obtain any rights in respect of any additional Trico Securities, if the effect
of such acquisition, agreement or other action would be to increase the
aggregate beneficial ownership of Trico Securities by the Purchaser Group
after the completion of the transactions contemplated by the Purchase
Agreement. Notwithstanding the foregoing, the Purchaser Group shall not be
obligated to dispose of any Trico Securities beneficially owned in violation
of such maximum percentage limitation if, and solely to the extent that, the
aggregate beneficial ownership of the Purchaser Group is or will be increased
solely as the result of a recapitalization of Trico, a repurchase of any Trico
Securities by Trico or any of its subsidiaries, or any other action taken by
Trico or its Affiliates (other than the Purchaser Group).
Section 3.2 Distribution of Trico Securities. Each of the Purchasers
covenants that it shall not, and that it shall cause all of its Affiliates and
Partners not to, directly or indirectly, sell, transfer any beneficial
interest in, or beneficial ownership of, pledge, hypothecate or otherwise
dispose of any Trico Securities, except:
(a) in such amounts as would not cause the rights issued pursuant to the
Trico Rights Agreement to become exercisable under the Trico Rights Agreement;
or
(b) pursuant to:
(1) a bona fide pledge of or the granting of a security interest or any
other lien or encumbrance in such Trico Securities to a lender that is not
a member of the Purchaser Group to secure a bona fide loan for money
borrowed made to one or more members of the Purchaser Group, the
foreclosure of such pledge or security interest or any other lien or
encumbrance that may be placed involuntarily upon any Trico Securities, or
the subsequent sale or other disposition of such Trico Securities by such
lender or its agent;
(2) a transfer, assignment, sale or disposition of such Trico Securities
to another member of the Purchaser Group;
(3) a distribution of Trico Securities to any member of the Purchaser
Group; provided that any arrangements coordinated or initiated by or on
behalf of a member of the Purchaser Group to assist its limited partners in
the sale of Trico Securities distributed to them must comply with the
provisions of this Section 3.2;
(4) sales in public offerings registered under the Securities Act
pursuant to Article V;
(5) sales effected in compliance with the provisions of Rule 144 under
the Securities Act; and
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<PAGE>
(6) other privately negotiated sales of Trico Securities, except for
sales to Persons with their primary operations in the oilfield services
industry that acquire 5% or more of the aggregate outstanding Trico
Securities.
Notwithstanding anything to the contrary in this Section 3.2, in effecting any
sale, transfer of any beneficial interest in or other disposition of Trico
Securities pursuant to Sections 3.2(c)(3), (4), (5) and (6), above, the
members of the Purchaser Group selling, transferring or disposing such Trico
Securities shall use their reasonable best efforts to refrain from selling,
transferring or disposing of such number of Trico Securities as would cause
the rights issued pursuant to the Trico Rights Agreement to become exercisable
under the Trico Rights Agreement.
Section 3.3. Proxy Solicitations. Each Purchaser covenants that it shall
not, and that no other member of the Purchaser Group shall, without the
consent of the Board, (a) solicit proxies or assist any other Person in the
solicitation of proxies for any proposal that would result in a change of
control of Trico; (b) publicly suggest or announce its willingness or desire
to engage in a transaction or group of transactions or have another Person
engage in a transaction or group of transactions that would result in a change
of control of Trico; (c) present to any third party any proposal that can
reasonably be expected to result in a change of control of Trico; (d)
initiate, induce or give encouragement to any other Person to initiate any
proposal that can reasonably be expected to result in a change of control of
Trico; or (e) directly or indirectly encourage, act as a financing source for
or otherwise invest in any other Person in connection with any of the
foregoing. For purposes of this Section 3.3, a "change of control" shall mean
the election to the Board at any one meeting at which Directors are elected of
such number of new directors that would constitute a majority of the number of
Directors comprising the Board subsequent to such meeting or the acquisition
by a Person or group within the meaning if Rule 13d-5 under the Exchange Act
of 50% or more of the outstanding Common Stock.
ARTICLE 4
Legend And Stop Transfer Order
Section 4.1 Legend and Stop Transfer Order. To assist in effectuating the
provisions of this Agreement, the Purchasers hereby consent:
(a) to the placement, on certificates issued with respect to the shares of
Common Stock issued to them pursuant to the Purchase Agreement or otherwise
promptly after any Trico Securities become subject to the provisions of this
Agreement, of the following legend on all certificates representing ownership
of Trico Securities owned of record by any member of the Purchaser Group or by
any Person where a member of the Purchaser Group is the beneficial owner
thereof, until such shares are sold, transferred or disposed in a manner
permitted hereby to a Person who is not then a member of the Purchasers:
The shares represented by this certificate are subject to the provisions of
a Stockholders' Agreement among, inter alia, Trico Marine Services, Inc.
and the Purchasers specified therein, and may not be sold, transferred,
pledged, hypothecated or otherwise disposed of except in accordance
therewith. Copies of the Agreement are on file at the office of the
Corporate Secretary of Trico Marine Services, Inc.; and
(b) to the entry of stop transfer orders with the transfer agent or agents
of Trico Securities against the transfer of Trico Securities except in
compliance with the requirements of this Agreement, or if Trico acts as its
own transfer agent with respect to any Trico Securities, to the refusal by
Trico to transfer any such securities except in compliance with the
requirements of this Agreement. Trico agrees to remove promptly all legends
and stop transfer orders with respect to the transfer of Trico Securities
being made to a Person who is not then a member of the Purchaser Group in
compliance with the provisions of this Agreement.
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<PAGE>
ARTICLE 5
Registration Rights and Rule 144
Section 5.1 Demand Registration.
(a) At any time after November 6, 1999, the Purchaser Representative may at
any time and from time to time make a written request for registration under
the Securities Act of not less than 20% of the Registrable Securities owned by
the Purchaser Group (a "Demand Registration"); provided that Trico shall not
be obligated to effect more than an aggregate of three (3) Demand
Registrations pursuant to this Section 5.1(a). Such request will specify the
number of shares of Registrable Securities proposed to be sold and will also
specify the intended method of disposition thereof. Notwithstanding the
foregoing, Trico shall have the right, but no more frequently than once in any
consecutive twelve-month period, to be excused from its obligation to effect a
registration pursuant to this Section 5.1(a) during any period within such
twelve-month period starting with a date sixty (60) days prior to Trico's
estimated date of filing of, and ending on a date six (6) months following the
effective date of, a registration statement pertaining to an underwritten
public offering of securities for the account of Trico; provided that Trico is
actively employing in good faith all reasonable best efforts to cause such
registration statement to become effective and that Trico's estimate of the
date of filing of such registration statement is made in good faith. A
registration will not count as a Demand Registration until it has become
effective; provided, however, that a Demand Registration that is either
withdrawn or not declared effective at the Purchaser Representative's request
shall count as a Demand Registration unless Participating Purchasers also bear
all of the expenses specified in Section 5.6 hereof (including those otherwise
payable by Trico) with respect to such Demand Registration.
(b) If the Purchaser Representative so elects, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the
form of an underwritten offering. The Company shall select the managing
underwriters and any additional investment bankers and managers to be used in
connection with the offering; provided that such managing underwriters and
additional investment bankers must be reasonably satisfactory to the Purchaser
Representative.
Section 5.2 Shelf Registration.
(a) The Purchaser Representative shall have the continuing right until the
Termination Date, but no more frequently than once in any consecutive twelve-
month period, to require Trico to prepare and file short-form Registration
Statements on Form S-3 with the SEC relating to the resale from time to time
of the Registrable Securities by the Purchaser Group in accordance with the
plan and method of distribution set forth in the Prospectus forming part of
such Registration Statement (a "Shelf Registration"); provided, however, that
Trico shall not be required to file a Shelf Registration unless Trico
Securities to be registered thereunder have an aggregate value of not less
than $3 million.
(b) Trico agrees to use its reasonable best efforts to keep each Shelf
Registration continuously effective until the first to occur of (1) the date
that is 90 days after the Registration Statement is declared effective by the
SEC and (2) the date on which all of the Registrable Securities covered by the
Shelf Registration have been sold pursuant thereto.
(c) Each Purchaser agrees that it will not, and that no other member of the
Purchaser Group will, sell any Registrable Securities pursuant to the Shelf
Registration during any Suspension Period. Trico agrees to cause any
Suspension Period to end as soon as reasonably practicable.
Section 5.3 Piggyback Registration. If Trico proposes to file a registration
statement under the Securities Act with respect to an offering of Common Stock
(a) for Trico's own account (other than a registration statement on Form S-4
or S-8 (or any substitute form that may be adopted by the SEC)) or (b) for the
account of any of its holders of Common Stock (other than the Purchaser
Group), then Trico shall give written notice of such proposed filing to the
Purchaser Representative as soon as practicable (but in no event less than 15
days before the
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anticipated filing date), and such notice shall offer the Purchaser Group the
opportunity to register such number of shares of Registrable Securities as the
Purchaser Representative may request on the same terms and conditions as
Trico's or such holder's Common Stock (a "Piggyback Registration"). Trico
shall use its reasonable best efforts to promptly cause all such Registrable
Securities to be registered along with the other shares of Common Stock to be
registered, if any.
Section 5.4 Reduction of Offering. Notwithstanding anything contained
herein, if the managing underwriter of an offering described in Section 5.3
delivers a written opinion to Trico that the size of the offering that the
Purchaser Group, Trico and any other Persons whose securities are included in
such offering intend to make is such that the success of the offering would be
materially and adversely affected, then the amount of Registrable Securities
to be offered for the account of any Person other than the Purchasers shall be
reduced to the extent necessary to reduce the total amount of Common Stock to
be included in such offering to the amount recommended by such managing
underwriter. If such a reduction in the amount of Registrable Securities to be
offered for the account of any Person other than the Purchaser Group,
including a reduction of such amount to zero, is not sufficient to reduce the
total amount of Common Stock to be included in such offering to the amount
recommended by such managing underwriter, then, and only then, shall the
amount of Registrable Securities to be offered for the account of the
Purchaser Group be reduced to the extent necessary to reduce the total amount
of Common Stock to be included in such offering to the amount recommended by
such managing underwriter. Notwithstanding the above, however, unless the
managing underwriter of an offering described in Section 5.3 delivers a
written opinion to Trico that the inclusion of shares in such offering by the
Purchaser Group would have an effect such that the success of the offering
would be materially and adversely affected, in all cases, the Purchaser Group
collectively shall have the right to include Registrable Securities in any
registration under Section 5.3 in an aggregate amount equal to at least twenty
percent (20%) of the shares of Common Stock being sold.
Section 5.5 Filings; Information. Whenever the Purchaser Representative
requests that any Registrable Securities be registered pursuant to Section 5.1
hereof, Trico will use its reasonable best efforts to effect the registration
of such Registrable Securities as promptly as is practicable, and in
connection with any such request:
(a) Trico will as expeditiously as possible (1) prepare and file with the
SEC a Registration Statement on any form for which Trico then qualifies and
which counsel for Trico shall deem appropriate and available for the sale of
the Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and use its reasonable best efforts
to cause such Registration Statement to become and remain effective, and (2)
prepare and file with the SEC such amendments and supplements to such
Registration Statement and the Prospectus used in connection with such
Registration Statement as may be necessary to keep such Registration Statement
effective in order to dispose of the shares registered thereunder in the
manner described in the underwriting agreement executed in connection
therewith and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such Registration Statement;
provided, however, that Trico shall have no obligation to maintain the
effectiveness of any registration statement filed hereunder or to cause the
information therein to remain current (A) for more than 90 days following such
Registration Statement's effective date in the case of a best efforts
underwritten public offering or (B) for longer than such period as is
customary and is required by the underwriter in the case of a firmly
underwritten public offering; and further provided that if Trico shall furnish
to the Purchaser Representative a certificate signed by a majority of the
Board stating that in their good faith judgment it would be detrimental or
otherwise disadvantageous to Trico or its stockholders for such a registration
statement to be filed as expeditiously as possible, Trico shall have a period
of not more than 90 days within which to file such registration statement
measured from the date of Trico's receipt of the Purchaser Representative's
request for registration in accordance with Section 5.1 hereof.
(b) Trico will, if requested, prior to filing a Registration Statement or
any amendment or supplement thereto, furnish to the Participating Purchaser
and each applicable managing underwriter, if any, copies thereof, and
thereafter furnish to the Participating Purchasers and each such underwriter,
if any, such number of copies of
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such Registration Statement, amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference
therein) and the Prospectus included in such Registration Statement (including
each preliminary Prospectus) as the Participating Purchasers or each such
underwriter may reasonably request in order to facilitate the sale of the
Registrable Securities.
(c) After the filing of the Registration Statement, Trico will promptly
notify the Participating Purchasers of any stop order issued or, to Trico's
knowledge, threatened to be issued by the SEC and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered.
(d) Trico will use its reasonable best efforts to qualify the Registrable
Securities for offer and sale under such other securities or blue sky laws of
such jurisdictions in the United States as the Purchaser Representative
reasonably requests; provided that Trico will not be required to (1) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subsection 5.5(d); (2) subject itself to
taxation in any such jurisdiction; or (3) consent to general service of
process in any such jurisdiction.
(e) Trico will as promptly as is practicable notify the Participating
Purchasers, at any time when a Prospectus is required by law to be delivered
in connection with sales by an underwriter or dealer, of the occurrence of any
event requiring the preparation of a supplement or amendment to such
Prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and promptly make
available to the Participating Purchasers and to the underwriters any such
supplement or amendment. The Purchasers agree that, upon receipt of any notice
from Trico of the occurrence of any event of the kind described in the
preceding sentence, the Purchasers will, and the Purchasers shall require any
other Participating Purchaser to, forthwith discontinue the offer and sale of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until receipt by the Participating Purchasers and the
underwriters of the copies of such supplemented or amended Prospectus and, if
so directed by Trico, the Participating Purchasers will deliver to Trico all
copies, other than permanent file copies, then in the Participating
Purchasers' possession of the most recent Prospectus covering such Registrable
Securities at the time of receipt of such notice. In the event Trico shall
give such notice, Trico shall extend the period during which such Registration
Statement shall be maintained effective as provided in Section 5.5(a) by the
number of days during the period from and including the date of the giving of
such notice to the date when Trico shall make available to the Participating
Purchasers such supplemented or amended Prospectus.
(f) Trico will enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the sale of such Registrable
Securities.
(g) Trico will furnish to the Participating Purchasers and to each
underwriter a signed counterpart, addressed to the Participating Purchasers or
such underwriter, of an opinion or opinions of counsel to Trico and a comfort
letter or comfort letters from Trico's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as the Purchaser
Representative or the managing underwriter reasonably requests.
(h) Trico will make generally available to its security holders, as soon as
reasonably practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the SEC
thereunder.
(i) Trico will use its reasonable best efforts to cause all such Registrable
Securities to be listed on each securities exchange or market on which the
Common Stock is then listed.
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(j) Trico may require the Participating Purchasers to furnish promptly in
writing to Trico such information regarding such members, the plan of
distribution of the Registrable Securities and other information as Trico may
from time to time reasonably request or as may be legally required in
connection with such registration.
Section 5.6 Registration Expenses. In connection with any Demand
Registration, any Piggyback Registration and any Shelf Registration, Trico
shall pay the following expenses incurred in connection with such
registration: (a) filing fees with the SEC; (b) fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (c) printing expenses; (d) fees and expenses incurred
in connection with the listing of the Registrable Securities; (e) fees and
expenses of counsel and independent certified public accountants for Trico and
(f) the reasonable fees and expenses of any additional experts retained by
Trico in connection with such registration. In connection with the preparation
and filing of a Registration Statement pursuant to Section 5.1, Trico will
also pay the reasonable fees and expenses of a single legal counsel chosen by
the Purchaser Representative. The Participating Purchasers shall pay any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities and any other expenses of the Participating Purchasers.
Section 5.7 Participation in Underwritten Registrations. No Person may
participate in any underwritten registered offering contemplated hereunder
unless such Person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements and this
Agreement.
Section 5.8 Holdback Agreements. The Purchasers agree not to, and that no
other Participating Purchaser will, offer, sell, contract to sell or otherwise
dispose of any Registrable Securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 14 days prior to,
and during the 90-day period beginning on, the effective date of such
registration statement other than the Registrable Securities to be sold
pursuant to such registration statement.
Section 5.9 Indemnification by Trico. Trico agrees to indemnify and hold
harmless the Participating Purchasers, their general partner and their
officers and directors, and each Person, if any, who controls such
Participating Purchasers within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus relating to the Registrable Securities or any
preliminary Prospectus or any amendment or supplement to such Registration
Statement, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and Trico will reimburse such Participating
Purchasers, general partners, officers, directors, and each such controlling
Person for any legal or any other expenses reasonably incurred by such
Participating Purchasers, general partners, officers, directors, or
controlling Persons in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that Trico will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any untrue statement or omission
made in such Registration Statement, preliminary Prospectus or Prospectus, or
any such amendment or supplement, in reliance upon and in conformity with
written information furnished to Trico through an instrument duly executed by
or on behalf of such Participating Purchasers specifically for use in
preparation thereof. Trico also agrees to indemnify any underwriters of the
Registrable Securities, their officers and directors and each Person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Participating Purchasers provided in this Section 5.9.
Section 5.10 Indemnification by The Purchasers. The Purchasers agree to, and
that the other Participating Purchasers will, indemnify and hold harmless
Trico, its officers and directors, and each Person, if any, who controls Trico
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from Trico to
the Participating Purchasers, but only with reference
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to information relating to the Participating Purchasers furnished in writing
by or on behalf of the Participating Purchasers expressly for use in any
Registration Statement or Prospectus, or any amendment or supplement thereto,
or any preliminary Prospectus. The Purchasers also agree to, and that the
other Participating Purchasers will, indemnify and hold harmless any
underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of Trico provided in this Section 5.10.
Section 5.11 Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 5.9 or
Section 5.10, such Person (the "Indemnified Party") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party shall have the right to assume the defense
of such proceeding and retain counsel reasonably satisfactory to such
Indemnified Party to represent such Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (a) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (b) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for all such Indemnified Parties, and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such separate
firm for the Indemnified Parties, such firm shall be designated in writing by
the Indemnified Parties. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.
Section 5.12 Rule 144. Trico covenants that it will file any reports
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as the Purchaser Representative may
reasonably request to the extent required from time to time to enable the
Purchaser Group to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144
under the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the SEC. Upon the request
of the Purchaser Representative, Trico will deliver to the Purchaser Group a
written statement as to whether it has complied with such reporting
requirements, a copy of the most recent annual or quarterly report of Trico,
and such other reports and documents so filed by Trico as may be reasonably
requested in availing the Purchaser Group of any rule or regulation of the SEC
permitting the selling of any such Registrable Securities without
registration.
Section 5.13 Future Grants of Registration Rights. From and after the date
of this Agreement, Trico shall not enter into any agreement with any holder or
prospective holder of any Trico Securities that provides for the granting to
such holder of registration rights unless such agreement is subject and
subordinate to the rights of the Purchaser Group hereunder or unless Trico
first obtains from the Purchaser Representative its consent to the terms
thereof.
Section 5.14 Transfer of Registration Rights. The registration rights of the
Purchaser Group under this Agreement may be assigned and transferred to any
transferee purchasing Registrable Securities, other than in a public offering
pursuant to a Registration Statement, in an amount equal to at least 100,000
Registrable Securities; provided, however, that the Company is given written
notice by the Purchaser Group at the time of such transfer stating the name
and address of the transferee and identifying the Registrable Securities with
respect to which the rights under this Agreement are being assigned. This
Agreement shall also be binding upon and enforceable by the heirs, executors,
or other personal representatives of the Purchasers and the successors and
assigns of Trico.
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ARTICLE 6
Miscellaneous
Section 6.1 Termination. Except as provided in this Section 6.1, the
respective covenants and agreements of the Purchasers and Trico contained in
this Agreement will continue in full force and effect until the Termination
Date; provided, however, that Trico shall have no further obligation to the
Purchaser Group to file a Registration Statement or to effect a registration
of Registrable Securities pursuant to Sections 5.1, 5.2 and 5.3 after the sale
or other disposition in accordance with this Agreement by the Purchaser Group
of such number of Trico Securities such that the Purchaser Group beneficially
own, in the aggregate, Trico Securities representing less than 10% of the
shares of Common Stock purchased thereby pursuant to the Purchase Agreement.
Upon any termination of this Agreement pursuant to this Section 6.1 all of the
obligations of Trico and the Purchasers hereunder shall terminate.
Section 6.2 Recovery of Fees. Except as otherwise described herein, any
party who shall obtain a final judgment in a court of competent jurisdiction
for the payment of damages by another party for a breach of this Agreement
shall be entitled to recover reasonable attorneys' fees and court costs
incurred in connection with the obtaining of such judgment.
Section 6.3 Notices. Any notice or other communication required or permitted
hereunder shall be in writing or by telex, telephone or facsimile transmission
with subsequent written confirmation, and may be personally served or sent by
United States mail and shall be deemed to have been given upon receipt by the
party notified. For purposes hereof, the addresses of the parties hereto
(until notice of a change thereof is delivered as provided in this Section 6
shall be as set forth opposite each party's name on the signature page hereof.
Section 6.4 Waivers and Amendments; Noncontractual Remedies; Preservation of
Remedies. This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by Trico and the Purchaser Representative or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in
exercising a right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right,
power or privilege, nor any single or partial exercise of any such right,
power or privilege, preclude a further exercise thereof or the exercise of any
other such right, power or privilege. The rights and remedies herein provided
are cumulative and are not exclusive of any rights or remedies that any party
may otherwise have at law or in equity. The rights and remedies of any party
based upon, arising out of or otherwise in respect of any breach of any
provision of this Agreement shall in no way be limited by the fact that the
act, omission, occurrence or other state of facts upon which any claim of any
such breach is based may also be the subject matter of any other provision of
this Agreement (or of any other agreement between the parties) as to which
there is no breach.
Section 6.5 Specific Performance. The parties recognize that in the event
Trico or the Purchaser Group should refuse to perform under the provisions of
this Agreement, monetary damages alone will not be adequate. The Purchaser
Group or Trico, as the case may be, shall therefore be entitled, in addition
to any other remedies which may be available, including money damages, to
obtain specific performance of the terms of this Agreement, without any
requirement for the posting of any bond. In the event of any action to enforce
this Agreement specifically, Trico and the Purchaser Group hereby waive the
defense that there is an adequate remedy at law.
Section 6.6 Severability. If any provision of this Agreement or the
applicability of any such provision to a person or circumstances shall be
determined by any court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement or the
application of such provision to persons or circumstances other than those for
which it is so determined to be invalid and unenforceable, shall not be
affected thereby, and each provision of this Agreement shall be valid and
shall be enforced to the fullest extent permitted by law. To the extent
permitted by applicable law each party hereto hereby waives any provision or
provisions of law which would otherwise render any provision of this Agreement
invalid, illegal or unenforceable in any respect.
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Section 6.7 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts and when so executed shall constitute one
Agreement, notwithstanding that all parties are not signatories to the same
counterpart.
Section 6.8 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware applicable to agreements
made and to be performed entirely within such state.
Section 6.9 Successors and Assigns. Subject to Section 6, this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
successors and assigns of the parties hereto.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first written above.
Address: TRICO MARINE SERVICES, INC.
2401 Fountain View, Suite 920
Houston, Texas 77057 By:
Attn: Chairman -----------------------------------
Name: Victor M. Perez
Title: Vice President and Chief
Financial Officer
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THE PURCHASERS:
Address: INVERNESS/PHOENIX PARTNERS LP
660 Steamboat Road
Greenwich, Connecticut 06830 By: Inverness/Phoenix Capital LLC,
Attn: W. McComb Dunwoody its General Partner
James C. Comis III
By: Inverness Management Fund I LLC,
its Managing Member
By: Key-Comis Limited Partnership,
its Managing Member
By: J.C. Comis LLC,
its General Partner
By: _____________________________
Name: James C. Comis, III
Title: Managing Member
Address: EXECUTIVE CAPITAL PARTNERS I LP
660 Steamboat Road
Greenwich, Connecticut 06830 By: Inverness/Phoenix Capital LLC,
Attn: W. McComb Dunwoody its General Partner
James C. Comis III
By: Inverness Management Fund I LLC,
its Managing Member
By: Key-Comis Limited Partnership,
its Managing Member
By: J.C. Comis LLC,
its General Partner
By: _____________________________
Name: James C. Comis, III
Title: Managing Member
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Annex C
BEAR, STEARNS & CO. INC.
BEAR STEARNS
245 PARK AVENUE
NEW YORK, NEW YORK 10167
(212) 272-2000
ATLANTA . BOSTON
CHICAGO . DALLAS . LOS ANGELES
NEW YORK . SAN FRANCISCO
FRANKFURT . GENEVA . HONG KONG
LONDON . PARIS . TOKYO
April 14, 1999
Board of Directors
Trico Marine Services, Inc.
250 North American Court
Houma, Louisiana 70363
Dear Sirs:
We understand that Trico Marine Services, Inc. or ("Trico") will enter into an
agreement (the "Purchase Agreement") with affiliates of Inverness/Phoenix
Capital LLC and its Affiliates ("Inverness") to invest up to $50 million in
two tranches in Trico by purchasing common stock (the "Transaction") at a
price of $6.25 per share (the "Consideration").
You have asked us to render our opinion as to whether the consideration to be
received by Trico in the Transaction is fair, from a financial point of view,
to Trico.
In the course of our analyses for rendering this opinion, we have:
1. reviewed the Purchase Agreement;
2. reviewed Trico's Annual Reports to Shareholders and annual Reports
on Form 10-K for the fiscal years ended December 31, 1995 through
1998 and other such public information with respect to Trico as we
deemed relevant;
3. reviewed certain operating and financial information, including
projections, provided to us by management relating to Trico's
business and prospects;
4. met with certain members of Trico's senior management to discuss
its operations, historical financial statements and future
prospects;
5. visited Trico's facilities in Houma, Louisiana and Houston, Texas;
6. reviewed the historical prices and trading volume of the common
shares of Trico;
7. reviewed publicly available financial data and stock market
performance data of companies which we deemed generally comparable
to Trico;
8. reviewed the terms of recent investments in companies which we
deemed generally comparable to the Transaction; and
9. conducted such other studies, analyses, inquiries and
investigations as we deemed appropriate.
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Board of Directors
Trico Marine Services
April 14, 1999
Page 2
In the course of our review, we have relied upon and assumed, without
independent verification, the accuracy and completeness of the financial and
other information provided to us by Trico. With respect to Trico's projected
financial results, we have assumed that they have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
management of Trico as to the expected future performance of Trico. In
addition, we assumed, in all respects material to our analysis, that the
representations and warranties of each party contained in the Purchase
Agreement are true and correct, each party will perform all of the covenants
and agreements required by it under the Purchase Agreement, that all
conditions to the consummation of the Transaction will be satisfied without
waiver thereof, and that the Transaction will be consummated in accordance
with the terms and conditions contained therein. We have not assumed any
responsibility for the independent verification of any such information or of
the projections provided to us, and we have further relied upon the assurances
of the management of Trico that they are unaware of any facts that would make
the information or projections provided to us incomplete or misleading. In
arriving at our opinion, we have not performed or obtained any independent
appraisal of the assets or liabilities of Trico. Our opinion is necessarily
based on economic, market and other conditions, and the information made
available to us, as of the date hereof.
We have acted as financial advisor to Trico in connection with the Transaction
and will receive a fee for such services, payment of which is contingent upon
the consummation of the Transaction.
In the ordinary course of business, Bear Stearns may actively trade the equity
securities of Trico for its own account and for the account of its customers
and, accordingly, may at any time hold a long or short position in such
securities.
It is understood that this letter is intended solely for the benefit and use
of the Board of Directors of Trico and does not constitute a recommendation to
the Board of Directors or any holders of Trico common stock as to how to vote
in connection with the Transaction. This opinion does not address Trico's
underlying business decision to pursue the Transaction. This letter is not to
be used for any other purpose, or reproduced, disseminated, quoted or referred
to at any time, in whole or in part, in any manner for any purpose without our
prior consent; provided, however, that this letter may be included in its
entirety in any proxy statement to be distributed to the holders of Trico
common stock in connection with the Transaction.
Based on the foregoing, it is our opinion that the Consideration to be
received by Trico in the Transaction is fair, from a financial point of view,
to Trico.
Very truly yours,
BEAR, STEARNS & CO. INC.
By: /s/ Stephen Stratz
----------------------------------
Senior Managing Director
C-2
<PAGE>
[FRONT]
TRICO MARINE SERVICES, INC.
250 NORTH AMERICAN COURT
HOUMA, LOUISIANA 70363
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF TRICO MARINE SERVICES, INC.
The undersigned hereby appoints Victor M. Perez and Kenneth W. Bourgeois, or
either of them, as proxies, each with full power of substitution, and hereby
authorizes each of them to represent and to vote, as designated below, all
shares of common stock of Trico Marine Services, Inc. held of record by the
undersigned on April 28, 1999 at the annual meeting of shareholders to be held
on June 8, 1999, or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW AND FOR
PROPOSAL 2:
<TABLE>
<S> <C>
1. Election of Directors
[ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY
as marked to the contrary below) to vote for all nominees listed below
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME LISTED BELOW.
Thomas E. Fairley Benjamin F. Bailar
2. Approval of Issuance and Sale of Shares of Common Stock Exceeding 20% of the Outstanding Common Stock
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In his discretion, to transaction such other business as may properly come before the meeting and any adjournments thereof.
</TABLE>
(PLEASE SEE REVERSE SIDE)
[REVERSE SIDE]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE
VOTED FOR BOTH OF THE DIRECTOR NOMINEES NAMED ABOVE AND FOR PROPOSAL 2. THE
PROXY HOLDERS NAMED ABOVE WILL VOTE IN THEIR DISCRETION ON ANY OTHER MATTER THAT
MAY PROPERLY COME BEFORE THE MEETING.
Date: ____________________, 1999
--------------------------------------------
Signature of Shareholder
--------------------------------------------
Additional Signature, if held jointly
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON.
WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH
SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF
A CORPORATION, PLEASE SIGN FULL CORPORATE
NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
